DBC 2470 - Order-To-Trade Ratio (OTR)

 

The Banking Tutor 

                Daily Banking Concept -  2470

Order-To-Trade Ratio (OTR)

 

The Order-to-Trade Ratio (OTR) measures the number of orders placed, including modifications and cancellations, relative to trades executed by a trading member.

 

A high OTR indicates excessive order placement with low execution or creating ‘noise’, often linked to algorithmic or high-frequency trading. Exchanges impose penalties on high OTR to curb market manipulation, reduce system congestion, and ensure fair trading.