Matching Orders

AAA

DEFINITION of 'Matching Orders'

The process for executing securities trades by pairing buy orders with sell orders. Matching orders utilize algorithms which determine how orders are matched and in what order they are filled, which subsequently differ based on the venue to which the trade is routed. One common algorithm used in matching orders utilizes first in, first out (FIFO), which prioritizes assets acquired first to be filed for selling first.

INVESTOPEDIA EXPLAINS 'Matching Orders'

Today, most trade matching is done using powerful computers with millions of transactions completed each day. In the past, trading was done through an open outcry system, and execution was performed through a face to face interaction. Traders are concerned with order matching because they not want to miss profit opportunities due to slower than expected order executions.

RELATED TERMS
  1. Painting The Tape

    A form of market manipulation whereby market players attempt ...
  2. Volume

    The number of shares or contracts traded in a security or an ...
  3. Sell

    The process of liquidating an asset in exchange for cash. The ...
  4. Manipulation

    The act of artificially inflating or deflating the price of a ...
  5. Buy

    1. A recommendation to purchase a specific security. A buy rating ...
  6. First In, First Out - FIFO

    An asset-management and valuation method in which the assets ...
Related Articles
  1. Economics

    Online Investment Scams Tutorial

    To bamboozle someone out of their money is an age-old ruse. Learn about some of the gimmicks modern-day swindlers use and avoid becoming a statistic.
  2. Active Trading Fundamentals

    The Basics Of Trading A Stock

    Taking control of your portfolio means knowing what orders to use when buying or selling stocks.
  3. Active Trading Fundamentals

    The Short And Distort: Stock Manipulation In A Bear Market

    High-quality stock reports needn't be confused with stock manipulators' dramatic claims.
  4. Investing Basics

    Explaining Market Value of Equity

    Market value of equity is the total value of all the outstanding stock as measured in the stock market at a particular time.
  5. Investing Basics

    What is Spread?

    Spread has several slightly different meanings depending on the context. Generally, spread refers to the difference between two comparable measures.
  6. Economics

    What is the Breakeven Point?

    In general, when gains or revenue earned equals the money spent to earn the gains or revenue, you’ve hit the breakeven point.
  7. Stock Analysis

    What is the Price-to-Sales Ratio?

    The price-to-sales ratio is an indicator of the value placed on each dollar of a company’s sales or revenues.
  8. Investing Basics

    What is Treasury Stock?

    Treasury stock is a company’s own stock that it holds in its treasury for later use.
  9. Investing Basics

    What is a Mid-Cap?

    Mid-cap companies are those with a market capitalization between two and $10 billion.
  10. Fundamental Analysis

    What's a Drawdown?

    A drawdown is usually expressed as a percentage change between the peak price and the low price (trough) of an investment.

You May Also Like

Hot Definitions
  1. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  2. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  3. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  4. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  5. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
  6. Absorption Costing

    A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption ...
Trading Center