Matching Orders


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.

BREAKING DOWN '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.

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

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

    An asset-management and valuation method in which the assets ...
  4. Volume

    The number of shares or contracts traded in a security or an ...
  5. Manipulation

    The act of artificially inflating or deflating the price of a ...
  6. Sell

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