$RED will officially start trading tomorrow, March 3, 2025, at 10:00 (UTC) after the restrictions are lifted, traders are wondering if their orders will be filled. Learn about Binance's price-time priority system to understand if your order will be filled.
How Binance determines the price of assets
Before delving into the price-time priority system, it is first important to break down how Binance determines the price of assets to understand how the system works.
Binance primarily uses the most recent transaction price as the market price. In the case of RED, there are no transactions, which raises the question, how does Binance determine the price?
In the absence of transactions, Binance may use the order book (supply-demand differential) and the highest bid or lowest ask to establish the asset price. That's why the price of RED is $0.8; it's where most of the offers are, there's a price limit, and no trading.
Price-Time Priority System
Binance follows a price-time priority system when filling orders. Here's how it works:
1. Price Priority (First Come, First Served at Each Price Level)
Orders at a better price (higher bid or lower ask) are filled first. If someone places a buy order at $0.8 after another person placed one at $0.6 or $0.4, the $0.8 order will be filled first if a seller appears at $0.8 or less.
2. Time Priority (FIFO - First In, First Out)
If multiple orders are at the same price level, they are filled in the order they were placed. If two buyers place an order at $0.8, the one that was placed first will be filled first when a seller matches it.
3. What happens if trading is not open?
If trading is not yet open, orders are placed in the order book but are not executed until trading begins. Once trading starts, Binance follows this price-time priority rule.
Order fulfillment expectation when trading starts
When Binance opens trading for Red Stone (RED), the first orders to be filled will depend on the price of the first sell orders and Binance's price-time priority matching system. Here's how it works:
Scenario: Orders at $0.4, $0.6, and $0.8
1. If the first sell order is at $0.4
Buy orders at $0.4 will be filled first. If there is more supply at $0.4, it will continue to be filled until the order book moves to $0.6.
2. If the first sell order is at $0.6
Buy orders at $0.6 will be filled first. The buy order at $0.4 will remain unfilled unless a seller lowers their price.
3. If the first sell order is at $0.8
Buy orders at $0.8 will be filled first. Orders at $0.4 and $0.6 will remain unfilled unless sellers lower their prices.
Key Points
Buy orders at a higher price are filled first because they match the first available sell order. If multiple orders exist at the same price, the one that was placed first will be filled first (FIFO rule). If the first sellers set high prices (for example, $1), none of the buy orders at $0.4, $0.6, or $0.8 will be filled immediately.
Thank you for reading.
Disclaimer: This should not be considered financial advice. Always do your own research #dyor
🔥 I will post technical analysis on the movement and price prediction of RED soon, so stay tuned!
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