A central limit order book is a matching system that keeps every resting buy and sell order sorted by price, then matches incoming orders against the best available price. Polymarket runs a CLOB, so bots place limit orders at chosen prices rather than trading against an automated market maker curve.
The practical consequence is that you control your price. You can rest a bid below the market and wait, which is what a market maker does, or you can cross the spread and take liquidity immediately, which is what a directional or latency strategy does.
It also means the book itself is data. Depth at each price level, how quickly quotes are pulled, and where size sits relative to the mid are all observable signals — and they are the reason historical order-book archives are worth more for backtesting than a bare price series.
Assuming the top-of-book price is achievable at your size. The best quote applies to the size resting at it; anything larger walks into worse levels, and on thin prediction markets that is most orders.
Browse the full glossary (32 terms), the strategy database, or the build guides.
