continuous double auction

A trading mechanism where buy and sell orders are matched immediately as they arrive, with price-time priority determining execution order.

Cluster: Liquidity & Trading

Related Concepts

• batched auctions — Collecting orders over a time window and clearing them simultaneously at a single price to reduce manipulation.
• market making — Continuously quoting bid and ask prices to facilitate trading, earning the spread while managing inventory risk.
• bid-ask spread — The difference between the highest price a buyer will pay and the lowest price a seller will accept, representing the cost of immediacy for traders.
• adverse selection — Risk that counterparties trade because they have superior information, causing losses for the market maker.

Articles about continuous double auction

• The Case For Alternative Ordering Mechanisms in Prediction Markets by Human Invariant