Post
Topic
Board Exchanges
Re: [OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading
by
Ichthyo
on 04/02/2014, 00:32:53 UTC
Quote
 No Crossed Orders:  We have made a change that will no longer show
so-called “marketable limit orders” on the order book prior to execution.

does it mean i have to market close every margin position and cant sell to close a long?

No it refers to the order book, or the "market depth display" if you want.

A single exchange has typically orders at a bid side and an ask side and a gap in between, called the "spread".
Whenever someone places an limit buy order above current ask price or a limit sell order below current bid price,
this order can be trivially filled and thus will be filled immediately.


But for a service like Bitfinex, which aggregates several actually independent markets, this structure doesn't hold anymore,
since not every limit buy matches automatically with any applicable limit sell order. If you just overlay the offers of two markets
into a single 2nd-level orderbook, it can well happen that the lowest ask order is below the highest bid order, whenever the behaviour of the underlying markets diverges substantially. This situation is known as "crossed orders". This can lead to confusion as to when limit or stop orders are actually triggered by the trading engine.


The change implemented now by the Bitfinex people is that they now don't display such "crossed orders" anymore. Rather they detect them and execute them in a best match way until the crossing has resolved and bid is below ask again. That is what I infer from the quoted statement and from observing how the trading engine works now. (Please correct me if I'm wrong)