The main idea behind the exchange and matching engine is to offer a platform for electronic exchange. EP3 matching engine offers one a comprehensive and efficient platform to stay updated with the ever-changing situations of the market. Thanks to the modern and the advanced exchange matching engine technology, marketplaces, and businesses can handle trading functions from price order matching formation easily and in a more reliable manner. The EP3 software provides a one-stop solution for complete trade support anytime anywhere.
What is an exchange matching engine?
An exchange matching engine is software that helps with seamless electronic exchange anywhere anytime using any type of device. The advanced technology has been incorporated in a way that there is the bidding of a wide array of trades. The matching and exchange engine utilize the use of single or multiple algorithms. Therefore there is delegation of trades among competing offers and bids at similar price rates.
The working principle of exchange matching engine
The algorithms used in an EP3 matching engine accumulate data on multiple created orders. When there are two different or opposite matches, a deal is made. A trader gets the option to utilize the algorithms to stop-limit order, limit, and also create a market. The matching engines make use of multiple varieties of algorithms.
The importance of matching order is incorporated by the time used in the algorithm. In the case of two similar identical algorithms, the matching, and exchange engine uses the one that was first created. An exchange matching engine is a complex software that accumulates and syncs data across a wide array of trading pairs.
What are the algorithms used?
There is a wide array of algorithms that are used in an exchange matching engine. The most common is the time-price-priority algorithm. This is the algorithm that indicates bids and offers that enter into the match engine. This algorithm enjoys priority over similar other bids and offers that enter gradually into the matching engine. Several other algorithms like the market order and limit orders are also supported by the EP3 exchange matching engine. Furthermore, such matching engines also comply with the standard designs, and APIs (FIX APIs).
Exchange matching engine APIs (Application Programming Interface)
The APIs used in the exchange matching engines act as the mediator between two orders promoting their communication and linkage. The exchange platforms make use of a wide array of APIs enabling the traders to make orders, receive data on markets, and also to subscribe to drop copies. The APIs include trading and fixing orders, fixing the market data, authentication and administration, and so on. It is the trading API that enables the client applications to send orders and receive market data through Google protocol buffers.
Features of exchange matching engines
Some of the key features of an EP3 matching engine are mentioned as follows:
- The exchange matching engine is considered to be strong, low in latency, and cater to different regulatory approvals.
- It is an open-source technology. Henceforth, there is a reduction in the operational expenses of licenses and other associated costs.
- The software can efficiently manage and handle the traditional assets and also support digital assets along with tokenized assets.
- Because the exchange matching engine is flexible and can be customized easily, the specific requirements and demands of the market can be fulfilled easily.
- The software can efficiently implement a wide array of trading models and matching algorithms.
- One of the highlighting features of exchange matching engines is that they can support clients from all over the world with custom-made solutions.
- The good news for liquidity providers is that the matching engines can fix low latency and integration issues.
EP3 matching engine is pivotal in any electronic exchange that stores orders placed by traders. The bids and orders are matched by the exchange engine enabling the traders to buy and sell assets at market prices. The extent of the market condition is impacted by the matching engine. Orders get assigned to a category by their timing, price, and bids. A deal automatically gets started when the exchange matching engine tracks the link between the bid and the ask orders. If required, a trader can also cancel the entire transaction.