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Finance GlossaryMatching Orders
Matching Orders
Definition of Matching Orders
Matching Orders refers to the process by which a stock exchange pairs buy and sell orders, prioritising based on price and time (Price-Time Priority). If a buyer’s price matches a seller’s price (order matching), a trade is executed. This automated mechanism ensures fair, transparent, and efficient order execution in the market.
Related Terms
American Option
An American Option allows the contract holder to exercise the right any time before or on the expiry date. American style options contracts are not available in India.
Oversold
Oversold is a term that is used to denote that a security's price has dropped sharply, and the broader market sentiment indicates a high probability of rebound or price correction in the near term. It implies that the selling pressure is likely to be nearing exhaustion. Traders use indicators such as the Relative Strength Index (RSI) to detect oversold levels. When the RSI level is below 30, the particular security is oversold. An oversold condition implies that the price decline may be due for a pause or reversal, but it is not a sure sign of a price increase.
Book To Bill Ratio
Book to Bill ratio is the value you get by dividing the total worth of new orders received by the total worth of orders sold. The formula to calculate Book to Bill ratio is:
Book to Bill ratio: Total worth of new orders received / Total worth of orders billed
Book to Bill ratio helps companies understand the demand and supply for their goods or services. A Book to Bill ratio of more than 1 means that there’s more demand and less supply.
Whereas, a Book to Bill ratio of less than 1 means that there’s less demand and more supply. Using these indicators, the company can work on increasing or limiting production.
Book to Bill ratio: Total worth of new orders received / Total worth of orders billed
Book to Bill ratio helps companies understand the demand and supply for their goods or services. A Book to Bill ratio of more than 1 means that there’s more demand and less supply.
Whereas, a Book to Bill ratio of less than 1 means that there’s less demand and more supply. Using these indicators, the company can work on increasing or limiting production.
Capital Gain Or Loss
A capital gain is a profit that an investor or trader earns by selling an asset while a capital loss is the money a trader or investor loses after selling an asset. Capital gains are taxed while capital losses can be used to offset gains.
Cost Inflation Index
A Cost Inflation Index or CII is used to calculate a financial security’s price after adjusting for inflation.
Cost Of Carry
Cost Of Revenue
Cover Order
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Narrow Market
A narrow market describes a situation where only a few stocks or sectors influence market movement, while the majority of stocks have low trading volume. It has few active participants on either the buy or sell side of the market. This limited participation suggests that the market trend is not broadly supported across the entire market.
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