Types of exchanges
Over-the-counter
An exchange where the buy and sell prices are pre-determined. CoinJar is an example of an over-the-counter exchange.
Order Book
An exchange where traders can submit buy and sell orders, determining the market price of a currency. CoinJar Exchange is an example of an Order Book exchange.
Trading terms
Order
The trade itself - a proposal to buy or sell a currency for another.
Trading pair
The two assets being traded against each other. The trading pair will typically be listed as ‘BTC / AUD’ etc. All cryptocurrencies on CoinJar Exchange can be traded against Australian dollars and Bitcoin.
Price
The value of your order - the most/least you’re prepared to settle for, depending on whether you’re buying or selling.
Size
The amount of your order - how much of the currency you’re choosing to buy or sell.
Bid price
When selling a currency, the best “bid” is the highest amount someone is willing to pay for the currency.
Ask price
When buying a currency, the best “ask” is the lowest amount someone is willing to sell the currency for.
Match
When an order is placed that can fulfil another, the two orders are “matched”.
Fill
When buy orders are matched with sell orders, each of the orders are then “filled”. The aim of all participants is to have their orders filled.
Volume
The amount of trading activity of a particular currency over a given period.
Liquidity
The ease of trading a currency. If a currency is more “liquid” than another, it’s easier for a trader to buy or sell it on the market. Higher volume and varied price points leads to better liquidity.
Maker
A trader that submits their own orders to the Order Book at a price they determine, introducing liquidity to the market.
Taker
A trader that accepts existing orders on the Order Book at a price they agree to, removing liquidity from the market.
Longing
Anticipating the price of a cryptocurrency will increase, and buying to take advantage of this.
Shorting
Anticipating the price of a cryptocurrency will drop, and selling to take advantage of this.