Orderbook and Limit Orders

Orderbooks and limit orders are essential components of financial markets, allowing for organized and efficient trading by matching buyers and sellers based on their specified conditions.

Orderbooks

In Mach, the term "orderbook" refers to the digital ledger that lists all outstanding buy and sell orders for a specific asset. These orders are matched based on price and time priority, ensuring an orderly and transparent trading process. The orderbook continuously updates as new orders are placed and existing orders are executed or canceled.

Limit orders

Limit orders allow users to specify the price at which they are willing to buy or sell an asset. Instead of executing immediately at the current market price, a limit order will only be fulfilled when the market price reaches the specified limit. This provides users with greater control over their trading strategies, enabling them to optimize their trades based on preferred price points.

In Mach, users can place limit orders directly through the protocol. These orders are then recorded in the orderbook and matched with corresponding buy or sell orders as market conditions meet the specified criteria. This system ensures that trades are executed efficiently and transparently, with users retaining control over their desired prices.

If a limit order is not immediately matched, it remains in the orderbook until the market conditions meet the specified criteria or the order is canceled by the user. This mechanism provides a robust and flexible trading environment, accommodating various trading strategies and preferences.