A central limit order book (CLOB) is a digital platform or system that facilitates trading financial instruments such as stocks, bonds, commodities or cryptocurrencies. It is a critical component of modern electronic trading and is used by financial exchanges, marketplaces, and trading venues to compare buy and sell orders from various market participants.
A CLOB is a database that organizes and manages incoming buy and sell orders, aggregating orders from different market participants. These orders are time-sequenced, creating an order book reflecting the market’s current supply and demand dynamics.