What Is “Price-Time Priority” in the Context of a CLOB?

Price-time priority is the rule governing order execution on a Central Limit Order Book (CLOB). It dictates that the best price (highest bid or lowest offer) is executed first.

If multiple orders are at the same best price, the order that was placed earliest (first in time) is executed next. This rule ensures fairness and transparency in order matching, which is a fundamental characteristic that distinguishes CLOBs from negotiated markets like RFQ.