SMP functionality includes which Market Model?

SMP functionality includes which Market Model?

• A. Market Model: AMM
• B. Market Model: CLOB
• C. Market Model: MBL
• D. Market Model: Hybrid

Answer: (B)

In trading platforms, how orders are stored and matched defines the Market Model. The SMP functionality is built around a Central Limit Order Book, where buy and sell orders sit in a shared ledger and are matched by price and then by time. This setup provides transparent price discovery and depth, allowing participants to see current interest at each price level and to trade when buy and sell prices cross. Automated market maker models rely on pricing algorithms outside an order book, and hybrids mix elements of different approaches; they don’t align with the typical SMP workflow as closely as a traditional order-driven book does. So the Market Model that fits SMP functionality is the Central Limit Order Book.

In trading platforms, how orders are stored and matched defines the Market Model. The SMP functionality is built around a Central Limit Order Book, where buy and sell orders sit in a shared ledger and are matched by price and then by time. This setup provides transparent price discovery and depth, allowing participants to see current interest at each price level and to trade when buy and sell prices cross. Automated market maker models rely on pricing algorithms outside an order book, and hybrids mix elements of different approaches; they don’t align with the typical SMP workflow as closely as a traditional order-driven book does. So the Market Model that fits SMP functionality is the Central Limit Order Book.