All About Trading & Matching Technology
What is a Matching Engine?
Electronic exchanges use a matching engine to facilitate price discovery and match buy and sell orders. The matching engine sits at the core of the exchange, maintaining order books for the assets traded on the exchange. Buy and sell orders submitted by the market participants are matched into trades based on parameters such as price and quantity of the bids and offers in the orderbook.
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Electronic exchanges use a matching engine to facilitate price discovery and match buy and sell orders. The matching engine sits at the core of the exchange, maintaining order books for the assets traded on the exchange. Buy and sell orders submitted by the market participants are matched into trades based on parameters such as price and quantity of the bids and offers in the orderbook.
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Market Infrastructure Organizations around the world use Nasdaq technology.
Why Use a Matching Engine?
By using a matching engine, marketplaces can provide transparent price discovery for market participants and ensure that orders are executed timely and in a fair and orderly manner to facilitate efficient exchange of assets.
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By using a matching engine, marketplaces can provide transparent price discovery for market participants and ensure that orders are executed timely and in a fair and orderly manner to facilitate efficient exchange of assets.
How Does a Matching Engine Work?
Market participants’ buy and sell orders are listed in an asset’s order book as bids and offers. The orderbook consolidates the available quantity of bids and offers at each price level. The matching engine uses algorithms to execute orders that match based on parameters such as price, quantity and time of order entry. There are different models that can be applied for matching of orders, such as continuous matching and different types of auctions.
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Market participants’ buy and sell orders are listed in an asset’s order book as bids and offers. The orderbook consolidates the available quantity of bids and offers at each price level. The matching engine uses algorithms to execute orders that match based on parameters such as price, quantity and time of order entry. There are different models that can be applied for matching of orders, such as continuous matching and different types of auctions.
Matching Engines vs Traditional Methods
Alternative methods of trading and matching of orders include manual processes for price discovery and negotiation, involving tools such as phone, chat and spreadsheets. These methods are more time consuming and prone to human error, and do not provide real-time processing of orders or automatic matching.
Marketplaces Benefitting from Scalable Matching Engines
Cryptocurrency Marketplace
As the cryptocurrency ecosystem continues to grow, infrastructure that supports this new asset class will need to grow with it. Nasdaq’s Marketplace Services Platform offers the benefit of scalability for any marketplace size and can continue to support cryptocurrency marketplaces as they continue to grow.
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As the cryptocurrency ecosystem continues to grow, infrastructure that supports this new asset class will need to grow with it. Nasdaq’s Marketplace Services Platform offers the benefit of scalability for any marketplace size and can continue to support cryptocurrency marketplaces as they continue to grow.
NFT Marketplace
Non-fungible tokens (NFTs) have grown in popularity over the last several years and with NFTs covering a variety of assets, ranging from collectibles to music, the NFT marketplace can benefit from matching technology. With the Marketplace Services Platform, NFT marketplaces can benefit from a matching technology that covers a wide range of asset classes, including new assets that are being transformed into NFTs.
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Non-fungible tokens (NFTs) have grown in popularity over the last several years and with NFTs covering a variety of assets, ranging from collectibles to music, the NFT marketplace can benefit from matching technology. With the Marketplace Services Platform, NFT marketplaces can benefit from a matching technology that covers a wide range of asset classes, including new assets that are being transformed into NFTs.
Real Estate Marketplace
The commercial real estate industry has emerged as an area that can benefit from a marketplace model. With the Marketplace Services Platform’s scalable matching technology, real estate marketplaces can now trade fractionalized shares of their properties, opening up access to capital and lowering the barrier to entry into the industry.
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The commercial real estate industry has emerged as an area that can benefit from a marketplace model. With the Marketplace Services Platform’s scalable matching technology, real estate marketplaces can now trade fractionalized shares of their properties, opening up access to capital and lowering the barrier to entry into the industry.
Carbon Credits Marketplace
As businesses and nations actively seek to reduce emissions, the need for matching technology for carbon credit marketplaces grows in importance. With the Marketplace Services Platform, carbon credit marketplaces can match buyers and sellers with carbon credits based on numerous parameters.
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As businesses and nations actively seek to reduce emissions, the need for matching technology for carbon credit marketplaces grows in importance. With the Marketplace Services Platform, carbon credit marketplaces can match buyers and sellers with carbon credits based on numerous parameters.
Spot Commodity Marketplace
Spot commodity markets, such as agriculture markets where producers and buyers meet and trade grain, traditionally use manual methods for trading. The Marketplace Services Platform enables these marketplaces to become electronic and have them offer more efficient matching of orders. Ultimately, allowing sellers to post sell orders and buyers to search among these orders based on multiple parameters.
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Spot commodity markets, such as agriculture markets where producers and buyers meet and trade grain, traditionally use manual methods for trading. The Marketplace Services Platform enables these marketplaces to become electronic and have them offer more efficient matching of orders. Ultimately, allowing sellers to post sell orders and buyers to search among these orders based on multiple parameters.
Nasdaq's Matching Technology Benefits
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Comprehensive Asset Class Coverage
Many traditional systems only cover one type of asset class, such as stocks, bonds, options, futures contracts, etc. Nasdaq's Matching Technology covers multiple asset classes, from equities to exotic derivatives to digital assets, simultaneously and can process thousands of transactions every second.
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High Performance
Nasdaq's Matching Technology is scalable, allowing you to increase volume and add new asset classes as your marketplace grows. You can also use our platform to create customized solutions tailored specifically to your marketplace's needs, regardless of the size of your marketplace.
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Reliable & Scalable
Nasdaq's Matching Technology is scalable, allowing you to increase volume and add new asset classes as your marketplace grows. You can also use our platform to create customized solutions tailored specifically to your marketplace's needs, regardless of the size of your marketplace.
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Global Connectivity Abilities
Nasdaq's Matching Technology can help to improve member onboarding and system integration through our connectivity protocols and APIs. Nasdaq offers industry standard connectivity protocols and APIs for FIX, ITCH, and OUCH and an easy-to-use trading workstation.
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Robust Regulatory Framework & Controls
As international regulations and marketplace best practices evolve, so does Nasdaq's Matching Technology. Our matching technology adopts best-in-class international practices within a robust regulatory framework, based upon our established knowledge and experience of running Nasdaq markets and marketplaces in over 50 countries around the world.
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Cloud-Based Technology
B2B, B2C, and C2C trading models are supported by Nasdaq's cloud-based matching technology in a 24x7 environment with dynamic scaling for order size and trading volumes.
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Related Solutions
Trading & Matching Technology
Manage the full range of trading functions - from price formation to order matching - in one solution with robust functionality supporting trading in any asset.
Marketplace Services Platform
Drive efficient, transparent trading at scale, attract liquidity, and protect market integrity with a SaaS platform that enables quick provisioning of reliable market infrastructure.