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# Which order will be executed first?

Discussion in 'Forex' started by Hayek, Jun 12, 2005.

1. ### Hayek

No.1: a limit sell order @1.2110 on Euro FX placed @8:30:19am.
No.2: another limit sell order @1.2115 placed @8:30:20am the same day.

Suppose the current time is @8:30:21am and the current bid price is 1.2117. Due to there are a large amount of limit sell orders to be executed, No.1 is still waiting in the queue. Does No.1 precede No.2 in the waiting queue? Or No.2 precedes No.1 because it is closer to the current bid price?

2. ### late apex

A sell limit order is placed above the current price, not below it. What you are describing calls for a sell stop (non-native) or sell stop limit (native).

With that out of the way, the order matching algorithm for CME GLOBEX currency futures is based on 2 factors -- price and time, in that order. If 2 or more same-direction orders share the same price, then and only then does FIFO (First In, First Out) rule kick in, to assign priority based on the time stamps.

It may help to visualize this as a separate queue at each price level (bid and offer), 1 tick apart.

To answer your specific question, sell stop No. 2 @15 precedes No. 1 @10. Price before time, for order matching.

3. ### Hayek

Yes, I actually meant to ask the execution order of two stop limit orders but I don't want to make the question complicated. You can suppose No.1 limit order was placed when its stop @20 was triggered @8:30:19 and No.2 limit order was placed when its stop @18 was triggered @8:30:20.

So will you give the same anwser?

4. ### late apex

OK, that would be a different scenario. In the first scenario, 10 and 15 are not-yet-triggered sell stops (as part of either a sell stop or a sell stop limit), placed below the current market at 17. Therefore, the offer @15 (No. 2) must be be triggered first and has a higher priority.

In the second scenario, both stops have already been triggered above 17, so 10 and 15 are just sell limits, the minimum at-or-above sell price for the active market order. As such, these limits have no impact on your queue placement by the matching engine. Order No. 1 @20, the earlier one, has priority.

5. ### Hayek

Thank you late apex.

I copy the below paragraph from CME Rulebook:
As you described in the last post, the price for stop-limit order should refers to the stop price instead of the limit price. For example, a stop-limit sell order with stop @2090 and limit @1900 has priority to a stop-limit sell order with stop@2080 and limit@2065, doesn't it? Suppose the current bid price is 2095.

Thank you.

6. ### late apex

Yes, that's absolutely correct. The stop, rather than the limit, is the only price that matters for queue placement by the GLOBEX matching engine.

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