Order Book Trading 101
This page introduces the central limit order book, or CLOB, and explains how to read the ElectronX Market Table. It is written for traders who are new to order book trading. By the end you should be able to look at the Market Table and understand what each column means, how the two sides of the market fit together, and how to view the depth behind the prices on screen.
What is a central limit order book?
A central limit order book is a single, shared list of every outstanding order to buy or sell a given contract. An order is a trader's instruction to buy or sell a set number of contracts, usually at a stated price. The name describes how it works:
- Central means every participant trades against the same book. There is one place where all orders to buy and sell meet.
- Limit means the book is built from limit orders, each of which carries a price.
- Order book means those orders are organised into a running list, ranked by price.
The book is also anonymous. A trader sees the price and quantity of every resting order, but not the identity of the participant who placed it. Orders match on price and time alone, so a large firm and an individual trader stand on equal footing at the same price. You can still recognise your own orders; you simply cannot see who is behind anyone else's.
On ElectronX, the Market Table is a real-time view of the CLOB for the contracts you select. Each row is one contract, and each row shows both sides of that contract's market.
Limit orders and market orders
Because the book is built from limit orders, it helps to understand the two most common order types before reading the table.
- A limit order sets a specific price or better. If it does not match right away, it rests on the book and adds to the visible depth until it trades or is cancelled.
- A market order takes the best available price immediately rather than resting on the book.
Order Types & Time in Force covers the full set of options and how each one behaves.
The two sides of the book: bids and asks
Every contract has two sides.
- The bid side collects orders to buy. The bid price is the amount a buyer is willing to pay.
- The ask side, also called the offer, collects orders to sell. The ask price is the amount a seller is willing to accept.
The highest bid and the lowest ask sit at the top of the book. These are the best bid and the best offer, and they represent the most competitive price on each side. The distance between them is the spread.
Each price also carries a quantity, which is the number of contracts available at that price. A bid of 23.25 for 11 contracts means a buyer is willing to buy up to 11 contracts at 23.25.
How orders match: price-time priority
ElectronX operates as a continuous central limit order book that matches orders according to price-time priority:
- A buy order at a higher price ranks ahead of a buy order at a lower price.
- A sell order at a lower price ranks ahead of a sell order at a higher price.
- When two orders rest at the same price, the one entered earlier ranks ahead of the one entered later.
A trade occurs when an incoming order meets a resting order on the opposite side at a price both sides accept. The best-priced orders are always first in line to trade.
Reading the ElectronX Market Table
Each row in the Market Table is one contract, identified by its product, location, and delivery hour. Electricity contracts are listed by hour ending — "HE13" refers to the hour ending at 1:00 PM. Each ISO's hour ending is time zone dependent; see the Product Specifications Index for more detail on ISO time zones. The trading session is the 24-hour period beginning at 06:15 UTC each day, and the Low, High, Last, and Volume columns reflect activity within the current session, resetting at the start of each new one.
Reading a row from left to right:
| Column | What it shows |
|---|---|
| Contract | The product, the ISO badge, the location badge, and the date and delivery hour for the row. |
| Sell | A SELL button that opens a sell order ticket for that contract. |
| Bid Qty | The number of contracts wanted at the best bid. |
| Bid | The best (highest) price a buyer is currently willing to pay. |
| Ask | The best (lowest) price a seller is currently willing to accept. |
| Ask Qty | The number of contracts offered at the best ask. |
| Buy | A BUY button that opens a buy order ticket for that contract. |
| Last | The price of the most recent trade in the current session. |
| Low | The lowest trade price of the current session. |
| High | The highest trade price of the current session. |
| Settle | The final settlement price for the contract. It displays TBD until settlement is determined, then shows the settled value in dollars per MWh. |
| Volume | The number of contracts that have traded in the current session. |
| State | The contract's current trading state. Common values are OPEN (available for order entry and matching) and EXPIRED (the delivery hour has been reached, so the contract no longer trades and is awaiting or has completed settlement). CLOSED indicates the contract is not presently open for trading. |
| Actions | Quick-action icons for that contract, including opening it in the Vertical Order Book, or setting an alert for a price threshold you would like to be notified on. |
The SELL and BUY buttons are colour-coded to mark the two sides of the market. SELL sits next to the bid side and BUY sits next to the ask side, because a trader who sells trades against the bid — the highest price a buyer is currently willing to pay — while a trader who buys trades against the ask, the lowest price a seller is currently willing to accept. Each button therefore sits next to the price and quantity it would act on.
A dash (-) in a price or quantity field means there is no resting order on that side of the contract at the moment. N/A in the Last, Low, or High columns means no trade has printed yet for that contract in the current session.
Viewing book depth
The Bid and Ask columns show only the top of the book, meaning the single best price on each side. Behind those best prices, additional orders may rest at less competitive levels. These deeper price levels are the book's depth.
Two elements on the Market Table let you view depth:
- The number on the left of each contract row shows how many price levels are currently resting for that contract. A contract showing
4has four price levels on the book. - The caret arrow at the far left of each row expands the contract. Selecting it opens the row to display each price level in order, moving outward from the best price. The expanded view shows the bid, ask, and quantities at every level, so you can see how many contracts are available beyond the top of the book and at what prices.
Collapsing the row again hides the individual levels and returns to the single best bid and best offer.