[bizologist]

Can someone direct me to a resource that would explain the inner workings of this software that we trade with every day.

It appears to me to be much more than just "matching orders", if it were that it would soon reach a stable state where buyers and sellers agree. Prices would not change. I have seen prices move into areas with no apparent reason where there is very light volume. This tells me something is driving it and exploring volatility. The prices appear to be unstable and move to generate volume, not reach market agreement.

Does anyone know the drivers? Time, volume, dollar volume of trades? Without this knowledge we are trading against a "black box", no different than Las Vegas.

Thanks for the listen.

[TheDude]

There are different ways of matching orders - FIFO is most common, but there is also pro-rata used in STIR contracts like Eurodollar.

Search CMEGroup.com - should be info there.

Why price will go to low volume/low liquidity levels is called 'price discovery', or more commonly known as 'stop running'. Remember the job of a market is to match orders. If you cant get your shopping done at Fred's Store, you'll go across the mall to his competitor to get your orders filled/complete your shopping list.

There is money to be made by filling orders, just like a store makes money selling you goods on your shopping list.

I hope I understood your question