What Is the Difference between a Limit Order and a Market Order in Execution Priority?
A market order is an instruction to buy or sell immediately at the best available current price, giving it the highest execution priority. It guarantees execution but not the price.
A limit order is an instruction to buy or sell at a specified price or better; it only executes if the market reaches that price. Limit orders are placed in the order book and are prioritized based on price (best price first) and then time (first-in, first-out).
Thus, a market order takes priority over all limit orders.
Glossar
Order
Execution ⎊ An order, within cryptocurrency, options, and derivatives, represents a conditional instruction communicated to an exchange or trading venue to buy or sell an asset at a specified price or under defined parameters.
Limit Order
Instrument ⎊ A limit order is an instruction to trade an asset at a specified price or better, providing the trader with precise control over the entry or exit cost, unlike a market order.
Execution Priority
Priority ⎊ In the convergence of cryptocurrency derivatives, options trading, and broader financial derivatives markets, priority denotes the sequential order in which submitted orders are processed and matched against available liquidity.
Order Book
Depth ⎊ An order book represents a listing of buy and sell orders for a specific cryptocurrency, option contract, or derivative, displaying price and quantity at various levels.
Market Order
Execution ⎊ A market order represents an instruction to execute a trade immediately at the best available price within the current order book, prioritizing speed of execution over price certainty.