Order Matching Priority

Order matching priority defines the rules by which an exchange determines which order gets filled first when multiple orders are at the same price. The most common rule is price-time priority, where the order that arrived first at the best price is executed first.

Some exchanges use pro-rata matching, where the available liquidity is distributed among multiple orders based on their size. Understanding these priority rules is vital for traders, especially those using high-frequency strategies, as it determines their place in the queue.

In decentralized finance, priority can be influenced by gas fees paid to validators, leading to front-running. Knowing how matching priority works allows traders to structure their orders for the best possible chance of execution.