In the previous blog, we discussed the undesirable situation of traders jumping ahead of one another by small fractions on orders, often leaving traders frustrated because they are not able to fill their orders or their orders are delayed. AAX believes this creates a bad customer experience and here is what we are doing to eliminate it.
AAX’s commitment towards customers’ experience
AAX leverages LSEG technology to enforce a price-time priority mechanism for orders to be executed in an orderly manner, which is a common practice in exchanges.
However, some exchanges allow orders to be placed with too much precision on the pricing, leaving gaps for traders to step in front of one another by a small fraction. This leaves traders frustrated as they are not able to fill their orders.
This problem with exchanges allowing orders to be placed with too much price precision is an existing challenge in the cryptocurrency market. Unfortunately, some exchanges choose to address it only after repeated complaints from users.
Turning a blind eye to or reacting slowly to such trading behaviour says a lot about the exchange operator’s commitment towards creating a customer-centric trading environment.
AAX’s price tick structure discourages cheating
AAX counters this issue by setting an optimal price precision in all of our all trading pairings making it much harder to jump the queue.
Take the bitcoin-USD trade pairing as an example. Some exchanges allow orders to be placed with 2 decimal places. When a user placed an order for a bitcoin at $4,000.11, it is possible for another trader to swoop in to take away the deal by placing an order which is one cent higher at $4000.12.
In this particular trade pairing, AAX only allows one decimal place precision for placing orders. This means that when a trader places an order at $4,000.1, the next closest price is $4,000.2, and therefore the bar for traders to jump the line has been raised significantly.
It is a commitment of AAX to proactively fix the problem before it happens. The team at AAX will continue to work towards enhancing users’ experience on the platform and bring a fair trading environment for all.
To find out more about AAX or to pre-register please visit www.aax.com.
