This traditional market structure aggregates all outstanding buy and sell orders at various price points into a single, centralized record for efficient matching. The depth and immediacy of the bid-ask spread within this structure are primary determinants of trade execution quality. High throughput is necessary to manage the rapid order flow characteristic of active crypto trading.
Mechanism
Price discovery occurs dynamically as incoming orders interact with the standing limit orders, establishing the prevailing market price for options and futures contracts. This system relies on an operator to maintain the integrity and sequence of transactions.
Depth
The total volume of resting orders on both the bid and ask sides quantifies the immediate liquidity available for large-scale position adjustments. Thin order books in this architecture lead to significant adverse selection costs for traders.
