Which principle governs execution order among multiple orders at the same price in continuous trading?

Which principle governs execution order among multiple orders at the same price in continuous trading?

• A. Proximity-based priority
• B. Random selection
• C. Largest order first
• D. Price-time priority

Answer: (D)

Price-time priority governs execution order when multiple orders sit at the same price. The best price is filled first, and among orders at that price, the oldest order in the book gets executed first. This FIFO ordering creates fairness and predictability in continuous trading, so an order’s position in the queue depends on when it arrived, not on its size or other factors. If two orders arrive at essentially the same moment, a tie-breaker based on precise timestamps may apply, but the standard rule is time-based priority within the best price level.

Price-time priority governs execution order when multiple orders sit at the same price. The best price is filled first, and among orders at that price, the oldest order in the book gets executed first. This FIFO ordering creates fairness and predictability in continuous trading, so an order’s position in the queue depends on when it arrived, not on its size or other factors. If two orders arrive at essentially the same moment, a tie-breaker based on precise timestamps may apply, but the standard rule is time-based priority within the best price level.