# Orders, Matching & Execution Szymon Kopyciński · 23 September 2026 ## 1. Orders ### Order An instruction to buy or sell something. At minimum, an order specifies: - instrument; - side (buy or sell); - quantity; - order type. ### Buy order An instruction to purchase an instrument. ### Sell order An instruction to sell an instrument. ### Market order An instruction to trade immediately at the best prices currently available. A market order prioritises execution over price. It does **not** guarantee the price you receive. ### Limit order An instruction to trade only at a specified price or better. For example: > Buy 100 shares at no more than £50. A limit order gives you price control, but it may never execute. ### Stop order An order that becomes active when the market reaches a specified trigger price. Stop orders are often used for risk management. Once triggered, a stop order becomes a market order, so the execution price can differ from the stop price. ### Stop-limit order A stop order that activates a limit order rather than a market order. It gives more control over the execution price, but the order may not execute at all. ### Time in force Instructions describing how long an order should remain active. Common examples include GTC, IOC, FOK and DAY. ### DAY order An order that remains active until the end of the trading session unless it is executed or cancelled earlier. ### GTC **Good-Til-Cancelled.** An order that remains active until it executes or is explicitly cancelled, subject to venue rules (some venues cap how long GTC orders can rest). ### IOC **Immediate-Or-Cancel.** Execute as much of the order as possible immediately and cancel any remaining quantity. ### FOK **Fill-Or-Kill.** Execute the entire order immediately or none of it. Partial execution is not allowed. ### Passive order An order that rests in the order book rather than trading immediately. A limit order that does not immediately match rests passively and provides liquidity. ### Aggressive order An order that immediately trades against liquidity already in the book. Market orders are aggressive. A limit order priced at or through the opposite side of the book also executes immediately. ### Maker A participant whose order adds liquidity to the book. ### Taker A participant whose order removes existing liquidity from the book. Many venues charge different fees to makers and takers. ### Crossing the spread Buying at the ask or selling at the bid. This gives immediate execution at the cost of paying the spread. ### Fill An execution of all or part of an order. ### Partial fill When only part of an order executes. If you submit an order for 1,000 shares and only 300 trade, you have received a partial fill of 300. ### Cancel An instruction requesting that an outstanding order be removed. Sending a cancellation request does not mean the order has been cancelled. Until the exchange confirms the cancellation, the order may still execute. ### Replace / Amend Changing an existing order. On many exchanges, changing the price or increasing the quantity loses queue priority, while reducing the quantity keeps it. ### Rejected order An order refused by an exchange, broker or internal risk system. Reasons include an invalid price, insufficient buying power, an incorrect instrument, exceeded risk limits or a malformed message. ## 2. Matching and execution ### Matching engine The exchange system that matches compatible buy and sell orders. It is the core of an electronic exchange. ### Matching algorithm The rules determining which orders execute against each other. The most common is price-time priority. Some markets, including certain interest-rate futures, use pro-rata matching, where an incoming order is shared among resting orders at the same price in proportion to their size. ### Price-time priority A matching rule in which orders with better prices execute first. At the same price, orders that arrived earlier execute first. ### Queue The collection of orders waiting at a particular price level. If several participants have orders at the same price, your position in that queue determines when you receive a fill. ### Queue position Your position relative to other orders at the same price. Queue position matters most for passive strategies. Orders at the front of a queue fill earlier and tend to suffer less adverse selection than orders at the back. ### Execution The completion of a trade. ### Trade An agreement between a buyer and seller to exchange an instrument at a price. ### Slippage The difference between the price you expected to trade at and the price you actually received. Slippage may arise from: - market movement; - insufficient liquidity; - latency; - price impact; - overly optimistic expected prices. ### Price impact The degree to which your own trading moves the market price. Buying a very large quantity may consume several ask levels and push the market higher. ### Market impact A broader term describing the effect your trading activity has on market prices. ### Sweep An aggressive order that trades through multiple price levels. For example, a sufficiently large market buy order may consume all quantity at 100.01, then 100.02, then 100.03. ### Locked market A market where the best bid equals the best ask. Within a single order book this cannot persist, because the orders would match. Locked markets arise across venues, when one venue's best bid equals another venue's best ask. ### Crossed market A market where the best bid is higher than the best ask. Within a single order book during continuous trading this cannot happen, because the orders would match. Crossed states can appear during auction call periods, across venues, or temporarily in consolidated or asynchronously updated data. Part of [Glossary Index](/blog/glossary-index) · Previous: [Prices, Order Books & Market Data](/blog/glossary-index/glossary-prices-orderbooks-market-data) · Next: [Market Microstructure & Trading Strats](/blog/glossary-index/glossary-market-microstructure-and-trading-strats)