Order Book & Order Lifecycle
An Order Book is a ledger that lists all buy and sell orders for a specific market, organized by price. The order book on Forkast is centralized for efficiency and transparency, with trades being matched offchain and settled onchain. It displays the following key components:
- Buy Orders (Green Side): Represent bids - prices that traders are willing to pay for an asset.
- Sell Orders (Red Side): Represent asks - prices that traders are willing to accept for an asset.
The gap between the highest bid and the lowest ask is called the Spread, indicating the liquidity and competitiveness of the market. See an order book example below.
Example Market: "Top Gaming Chain by Market Cap on Dec 31"
In this market, participants trade "Ronin-Yes" shares, predicting whether Ronin will be the top gaming blockchain by a specified date.
Bids (Buyers) | Asks (Sellers) |
|---|---|
$0.70 - 90 shares | $0.72 - 1 shares |
$0.60 - 100 shares | $0.80 - 1 shares |
$0.50 - 90 shares | $0.90 - 1 shares |
$0.40 - 90 shares | |
- Bids (Green): Traders are willing to pay up to $0.70 for 90 shares of Yes.
- Asks (Red): Sellers are asking for $0.72 to sell shares of No.
- Spread: The difference between the highest bid ($0.70) and the lowest ask ($0.72).
Forkast supports two types of orders:
- Definition: Execute trades immediately by matching with the best available prices in the order book.
- Example:
- A trader places a market order to buy 60 shares of Ronin Yes.
- The system matches the order with the first corresponding ask: 60 shares at $0.60.
- Definition: Specify a maximum price for buying or a minimum price for selling, which may not execute immediately if no match is found.
- Example:
- A trader places a limit order to buy 75 shares of Ronin Yes at $0.50.
- The order remains on the order book until a seller matches the price.
Orders are matched based on the following rules:
- Price Priority: Buy orders with higher bid prices are matched with sell orders having lower ask prices.
- Example: A buy order at $0.60 will match a sell order at $0.55 first.
- Time Priority: If multiple orders have the same price, the system prioritizes the earliest placed order.
- Refunds for Price Differences: If a buy order price exceeds the matched sell order price, the buyer is refunded the difference.
- Example: Buyer bids $0.70, seller asks $0.65 → Buyer pays $0.65, and the $0.05 difference is refunded.
- Order Completion:
- Market Orders: Any unmatched amount is canceled and refunded.
- Limit Orders: Remaining unmatched amounts stay on the order book until fulfilled or canceled.
Open orders are your orders that have not been matched yet. They are displayed inside a market for which the order is opened, and under the tab Open Orders. From this place, you can cancel any open order.
Positions that you hold inside a market are shown on the same place, under the My Positions tab. These refer to previously matched orders.
All positions and open orders across all markets can be viewed and managed from the Portfolio page.
- To cancel an open order, click the Buy/Sell next to the order in the positions section of the market.
- Once canceled, the collateral is immediately refunded to your account.
- Placement: A user places a market or limit order, which enters the order book.
- Matching: The system matches the order based on price and time priority rules.
- Execution:
- Market orders execute immediately, matching with the best available price.
- Limit orders execute when a matching order meets the specified price.
- Settlement: Completed orders are recorded onchain for transparency.
Forkast's order book ensures fast matching and execution, with detailed management tools for user convenience. The efficient lifecycle and comprehensive matching rules make it easy for traders to engage confidently in prediction markets.
