The Order Book
The order book is the core mechanism that matches buyers and sellers on TPX. It maintains a list of all open orders for each market, organized by price.
How Orders Work
When you place an order, you specify the outcome (YES or NO), the price you're willing to pay, and the quantity of shares you want. Your order enters the order book and waits to be matched.
- Bids are buy orders — the prices traders are willing to pay
- Asks are sell orders — the prices traders are willing to accept
- Spread is the gap between the best bid and best ask
Price Discovery
Prices on TPX emerge from the interaction of buyers and sellers. When many traders want to buy, prices rise. When many want to sell, prices fall. The current price reflects the market's collective estimate of the probability.
Example: If YES shares are trading at 70¢, the market believes there's roughly a 70% chance the event will happen.
Order Matching
Orders are matched using price-time priority. The best-priced orders are matched first. When multiple orders have the same price, earlier orders take priority. This ensures fair and efficient trading for all participants.