DATE: July 30, 2012
Can you explain the rules associated with order priority?
In general, there are three levels of priority. First, best price receives the highest priority. The order with the highest bid or lowest offer will be filled first. Second, is time. If two orders from the same type of trader ? retail or professional ? are submitted at the same price, then the first order to arrive at an exchange gets filled first. Third, retail customers have priority over professional traders, regardless of the time an order is entered. To learn more about order priority, view this week's segment of "Ask the Institute."