Central Limit Order Book (CLOB)

간단한 설명:

A central limit order book is an exchange-style execution method common in the equity world that matches all bids and offers according to price and time priority. It allows all users to trade with each other, instead of being intermediated by a dealer.

주요 설명:

A central limit order book (CLOB) is a trading system where all buy and sell orders for a specific asset are consolidated in one place, facilitating the efficient matching of trades. In this arrangement, orders are organized by price levels, showcasing the best available buy orders (bids) and sell orders (asks) prominently.

Traders can submit limit orders, which set a maximum price for purchases or a minimum price for sales, or market orders, which execute immediately at the current market price. The CLOB provides transparency, allowing all participants to view the order book, which aids in making informed trading decisions based on available liquidity.

This model is widely used in traditional financial markets and is becoming more common in cryptocurrency exchanges. By enhancing price discovery, the central limit order book can lead to tighter spreads between bid and ask prices, creating a more competitive trading environment. However, it requires sufficient liquidity and may face challenges like order manipulation during periods of high volatility.