How to trade

PredictMarkets is like a virtual stock exchange - in our markets we match buyers and sellers.

Orders

When a trader wants to buy or sell a contract they place an order. An order has three components: a quantity, a unit price and an expiry time.

The quantity specifies the number of contracts you want to buy or sell.

The unit price is the price per contract you want to pay (if you're buying) or receive (if you're selling).

The expiry time determines how long the order will remain 'live' for. If the order has not been filled at the end of the expiry time it will automatically be cancelled.

How the exchange matches orders

In order to match buyers and sellers, the exchange maintains a list of the orders it has currently received. This is called the order book. The order book is split into two halves - the buy side and the sell side. Each side is sorted so that the 'best' order appears at the top. For the buy side this is the order with the highest unit price; for the sell side this is the order with the lowest unit price.

When the exchange receives an order it will check the order against the best order on the opposing side of the order book (if one exists). So when you place a buy order, the exchange will compare it against the best sell order in the order book. If the orders 'match' then a trade will be executed. Two orders 'match' if the buy price is greater or equal to the sell price.

If your order doesn't match any existing orders it will be placed into the order book, where it will remain until someone comes and matches it, or it expires. Additionally, your order may be partially executed. This occurs when the orders on the book can't fill your entire order - in this instance, the remainder of your order is put into the book.