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Order matching system
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<p>An order matching system or simply matching system is an electronic system that matches <a href="/facts/Order_(exchange)/hVNkxmMJ">buy and sell orders</a> for a <a href="/facts/Stock_market/DyTRW5kA">stock market</a>, <a href="/facts/Commodity_market/2vH05eJ5">commodity market</a> or other <a href="/facts/Financial_exchange/NTwgFnBD">financial exchanges</a>. The order matching system is the core of all electronic <a href="/facts/Exchange_(organized_market)/NTwgFnBD">exchanges</a> and are used to execute orders from participants in the exchange. </p><p>Orders are usually entered by members of an exchange and executed by a central system that belongs to the exchange. The algorithm that is used to match orders varies from system to system and often involves rules around <a href="/facts/Best_execution/1svwEuzC">best execution</a>. </p><p>The order matching system and implied order system or Implication engine is often part of a larger <a href="/facts/Electronic_trading/UtfA0MLm">electronic trading</a> system which will usually include a <a href="/facts/Settlement_system/Jl6SQkJy">settlement system</a> and a <a href="/facts/Central_securities_depository/vrNkdG80">central securities depository</a> that are accessed by <a href="/facts/Electronic_trading_platform/UtfA0MLm">electronic trading platforms</a>. These services may or may not be provided by the organisation that provides the order matching system. </p><p>The matching algorithms decide the efficiency and robustness of the order matching system. There are two states for a market: continuous trading where orders are matched immediately or auction where matching is done at fixed intervals. A common example when a matching system is used in auction state is at the market open when a number of orders have built up. </p>