Central Limit Order Book: Difference between revisions
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Most markets for shares (stock) and futures use | Most markets for shares (stock) and futures use 'order-driven' approaches. In such markets, would-be buyers and sellers submit orders to a central limit order book listing all outstanding buy and sell orders. Trade execution takes place if a new order can be matched against an existing order in the book. If not, the order enters the list and waits for a new offsetting would-be trade to arrive. | ||
Following [[G20]] agreement to seek to move much of derivative trading away from over the counter ([[OTC]]) trading in request for quote (RFQ) systems to more transparent models it is expected that, over time, much derivative trading will move to CLOB systems. As with other markets, RFQ approaches are likely remain, especially for less liquid trades. | Following [[G20]] agreement to seek to move much of derivative trading away from over the counter ([[OTC]]) trading in request for quote (RFQ) systems to more transparent models it is expected that, over time, much derivative trading will move to CLOB systems. As with other markets, RFQ approaches are likely remain, especially for less liquid trades. | ||
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==See also== | ==See also== | ||
* [[Book]] | |||
* [[Derivative]] | |||
* [[G20]] | |||
* [[Order book]] | |||
* [[Over the counter]] (OTC) | |||
* [[Swap execution facility]] | * [[Swap execution facility]] | ||
* | |||
==External link== | |||
* [http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/qb110404.pdf Trading models and liquidity provision in OTC derivatives markets, Bank of England Quarterly Bulletin, Q4 2011.] | |||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
[[Category:Financial_products_and_markets]] | [[Category:Financial_products_and_markets]] | ||
Latest revision as of 15:14, 14 July 2022
(CLOB).
Most markets for shares (stock) and futures use 'order-driven' approaches. In such markets, would-be buyers and sellers submit orders to a central limit order book listing all outstanding buy and sell orders. Trade execution takes place if a new order can be matched against an existing order in the book. If not, the order enters the list and waits for a new offsetting would-be trade to arrive.
Following G20 agreement to seek to move much of derivative trading away from over the counter (OTC) trading in request for quote (RFQ) systems to more transparent models it is expected that, over time, much derivative trading will move to CLOB systems. As with other markets, RFQ approaches are likely remain, especially for less liquid trades.
See also
