Exchange Matching Engine

Coinbase Exchange operates a continuous first-come, first-serve order book. Orders are executed in price-time priority as received by the matching engine.

Self-Trade Prevention

Self-trading is not allowed on Coinbase Exchange. When two orders from the same user cross, they do not fill one another.

The STP instruction on the taker order (latest order) takes precedence over the older/resting order.

You can define your self-trade prevention behavior when placing an order with the STP flag:

Self-Trade Prevention Option	STP Flag	Description
Decrement & cancel (default)	dc	Cancel smaller order and decrement larger order by the smaller size. If the same size, cancel both.
Cancel oldest	co	Cancel older (resting) order in full. Continue to execute the newer taking order.
Cancel newest	cn	Cancel newer (taking) order in full. Let the old resting order remain on the order book.
Cancel both	cb	Cancel both orders immediately.

Market Orders

When a market order using decrement and cancel (dc ) self-trade prevention encounters an open limit order, the behavior depends on which fields were specified for the market order.

• If funds and size are specified:

  • For a market buy order, size is decremented internally within the matching engine and funds remain unchanged. The intent is to offset your target size without limiting your buying power.

• If funds is specified (and not size):

  • For a market buy order, funds are decremented.
  • For a market sell order, size is decremented when encountering existing limit orders.

Price Improvement

Orders are matched against existing order book orders at the price of the order on the book, not at the price of the taker order.

Example

User A places a buy order for 1 BTC at 100 USD. Then User B places a sell order for 1 BTC at 80 USD. The result is that the trade occurs at 100 USD because User A’s order was first to the trading engine and User A has price priority.

Order Lifecycle

Order State	Description
received	Valid orders that are sent to the matching engine and confirmed immediately.
open	Any part of the order not filled immediately. Orders stay open until canceled or filled by new orders.
done	An full order executed against another order immediately. A partial order filled or canceled (and no longer eligible for matching)