Price Priority

Price priority is a fundamental rule in exchange matching engines where orders with the best prices are executed first. For buy orders, the highest price gets priority, while for sell orders, the lowest price gets priority.

This ensures that the market moves toward an efficient price equilibrium where the best value is always served. If multiple orders exist at the same price, the matching engine usually applies time priority to decide which order is filled first.

This hierarchy is essential for maintaining a fair and orderly market for all participants. Understanding these rules allows traders to position their orders strategically within the order book to increase the likelihood of execution.

It is a cornerstone of market microstructure design.