Central Limit Order Book: Difference between revisions
imported>Doug Williamson (Added brackets around OTC and line space before see also) |
imported>Doug Williamson (Make quote marks single & link with Derivatives page.) |
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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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* [[Swap execution facility]] | * [[Swap execution facility]] | ||
* [[Derivative]] | |||
* Trading models and liquidity provision in OTC derivatives markets, Bank of England Quarterly Bulletin, Q4 2011, [[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, [[http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/qb110404.pdf]] | ||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
[[Category:Financial_products_and_markets]] | [[Category:Financial_products_and_markets]] | ||
Revision as of 20:37, 6 April 2015
(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
- Swap execution facility
- Derivative
- Trading models and liquidity provision in OTC derivatives markets, Bank of England Quarterly Bulletin, Q4 2011, [[1]]
