How are orders matched?

In general, orders are matched when bid (buy) and ask (sell) prices equal or cross each other - prioritized based on “best price” and time submitted, similar to the stock market.

Prices cross when a bid (an order to buy) is placed at a price higher than any current asks on the order book, or vice versa, when an ask (an order to sell) is placed at a price lower than any current bids on the order book.

What if there are multiple offers, which gets matched first?

Orders in this case are matched in order of time priority. That is, the orders that were first submitted will get matched first.

What happens if my order doesn't get matched?

If your order does not match, this means either:

  1. your desired bid (buy) price is lower than the lowest ask currently on the order book, or

  2. your desired ask (sell) price is higher than the highest bid currently on the book

In these cases, your order will remain pending until it is matched. In other words, it will remain on the order book until an order on the other side gets submitted that would match yours.

A matching order in the case of (1) would be an ask order equal to or less than your desired bid price. A matching order in the case of (2) would be a bid order equal to or greater than your desired ask price.

Pending orders are canceled after 30 days.

What happens if my order is partially matched?

If only a portion of your bids or asks can be matched with the current order book, the matched orders will be executed, and the remaining orders will stay on the order book.

For example, if you placed a bid for 2 shares at $10, but there is currently only 1 ask on the order book for $10 (and no other asks), then you would receive 1 share. Your other bid would stay on the order book until another user puts in an ask order of $10 or above.

The reverse is also true if you placed an ask, that is, if you put a bid for 2 asks at $10, but there is currently only 1 bid on the book for $10, you would only sell 1 share (for $10). Your other ask would remain pending on the order book.

What price are matched orders executed at?

Your trade will execute at the “best price,” defined as the current highest bid (if you are the seller) or lowest ask (if you are the bidder) on the order book, similar to the stock market.

For example, if you would like to sell one share, and the current highest bid on the order book is $12, then you can sell your share at $12. If you input an ask price lower than $12, your trade will still execute at $12, because this is the best price.

The same mechanics occur on the other side. If you would like to buy a share, and the current lowest ask on the order book is $12, then you can buy a share at $12. If you input a bid price higher than $12, your trade will still execute at $12.

In short:

  • in order to instantly sell a share, you would need to submit an ask equal to or less than the highest bid currently on the order book to “match”

  • in order to instantly buy a share, you would need to submit a bid order that is equal to or greater than the lowest ask currently on the order book to “match”

If you have any questions about how Otis works or your Otis account, please don't hesitate to give our support team a shout on the app or via email at [email protected].

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