Hidden Order Types
Hidden order types are special order instructions that allow traders to keep their order size or price level invisible in the public order book. These orders only become visible when they are executed against an incoming trade.
They are a powerful tool for large participants who wish to avoid revealing their full trading interest to the market. By using hidden orders, traders can prevent others from adjusting their quotes in response to the hidden liquidity.
However, they may also result in slower execution as they are often prioritized behind visible orders. Understanding when to use these types is a key skill for managing execution strategy.
They are a common feature in both centralized exchanges and some advanced decentralized platforms.
Glossary
Matching Engine
Function ⎊ A matching engine is a core component of any exchange, responsible for executing trades by matching buy and sell orders.
Order Book
Structure ⎊ An order book is an electronic list of buy and sell orders for a specific financial instrument, organized by price level, that provides real-time market depth and liquidity information.
Private Matching
Anonymity ⎊ Private Matching, within cryptocurrency and derivatives, represents a cryptographic protocol enabling parties to determine if their datasets share common elements without revealing the underlying data itself.
Matching Engines
Architecture ⎊ Matching engines, within cryptocurrency, options, and derivatives trading, represent the underlying technological infrastructure facilitating order interaction and trade execution.