💼 Trading Operations Explained

Trading operations refer to the back-end processes that ensure trades are executed, confirmed, settled, and recorded properly. This is crucial for both manual and automated (bot) trading.

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🔹 1. Order Placement

The trader (or bot) places a buy or sell order.

Orders can be:

Market Order: Executes immediately at the current price.

Limit Order: Executes at a specific price.

Stop Order: Triggers a market or limit order when a price hits a threshold.

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🔹 2. Order Matching

The exchange (e.g., Binance, Coinbase) matches buy and sell orders.

This happens in a matching engine using price/time priority.

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🔹 3. Trade Execution

Once matched, the order is executed — meaning ownership is transferred.

Traders see the change in their portfolio balance.

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🔹 4. Trade Confirmation

A confirmation message is sent with:

Execution price

Time

Quantity

Fees

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🔹 5. Clearing

Ensures both parties have the funds/assets to settle the trade.

In crypto, this can be near-instant.

In traditional finance, clearing might take T+2 days.

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🔹 6. Settlement

Final transfer of assets/funds between buyer and seller.

Crypto uses blockchain settlement; traditional markets use clearing houses.

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🔹 7. Post-Trade Reporting & Reconciliation

Records the trade in books.

Ensures internal records match exchange records.

Needed for tax, auditing, and compliance.

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⚙️ Common Tools in Trading Operations

Trading platforms: Binance, MetaTrader, Robinhood

Clearing systems: For banks and large institutions

Back-office software: For reconciliation and reporting

APIs & Bots: Automate operations in real-time