Starting from March 3, 2025, 10:00 (UTC), $RED will officially be available for trading on Binance. Traders are eagerly anticipating if their orders will be fulfilled. Let’s dive into Binance’s price-time priority system to understand how this works.
Red Money Flow of one day:
How Binance Determines Asset Price
Before we delve into the price-time priority system, it’s essential to understand how Binance determines asset prices.
Binance primarily uses the price of the most recent trade as the market price. However, in cases like $RED there are no trades, how does Binance set the price?
In the absence of trades, Binance can use the order book (bid-ask spread) and the highest bid or lowest ask to set the asset price. That’s why the price of $RED is $0.8—this is where most bids are, there is a price limit, and no trading has occurred.
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. For instance, 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 or below $0.8.
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. For example, if two buyers place orders at $0.8, the one placed earlier will be filled first when a seller matches it.
3. What Happens If Trading Is Not Open?
- If trading isn’t open yet, orders are placed in the order book but not executed until trading begins. Once trading starts, Binance follows this price-time priority rule.
Order Fulfillment Expectations When Trading Starts
When Binance opens trading for Red Stone ($RED), the first orders to be filled will depend on the price of the initial sell orders and Binance’s price-time priority matching system. Here’s a breakdown:
- Scenario: Orders at $0.4, $0.6, and $0.8
1. If the First Sell Order is at $0.4
- The $0.4 buy orders will be filled first. If there’s more supply at $0.4, it continues filling until the order book moves to $0.6.
2. If the First Sell Order is at $0.6
- The $0.6 buy orders will be filled first. The $0.4 buy order remains unfilled unless a seller lowers their price.
3. If the First Sell Order is at $0.8
- The $0.8 buy orders will be filled first. The $0.4 and $0.6 orders remain unfilled unless sellers lower their prices.
Key Takeaways
- 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 placed earlier gets filled first (FIFO rule).
- If the first sellers set high prices (e.g., $1), none of the $0.4, $0.6, or $0.8 buy orders get filled immediately.
Thanks for reading.
Disclaimer: This should not be considered financial advice. Always do your own research (#pakcryptohub ).
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