Time Determines Execution When Bid Prices Are Equal

Reading time: 3.0-4.0 min

This lesson mirrors previous Lesson 17, applying the same execution rules to the opposite side of the book.

Here, all eligible bids share the same price.
As in Lesson 17, price alone is not sufficient.

Stage 1. Multiple Bids at the Same Price

Event: Three bid orders arrive, all at $17 for a total of 13 apples.

Orders are recorded in bids ledger.
The first bid is entered @ the last - @

All bids have the same price.
They differ only by arrival time.

No trade occurs yet.

Stage 2. A Sell Order Arrives

Event: At a seller submits an order to sell 13 apples at $17

The sell price matches the bid price.
Execution can proceed.

Stage 3. Execution Proceeds by Time Priority

Because all eligible bids have the same price, the recorded bid arrival time determines execution sequence.

Execution 1

  • A - 4 apples are taken from the bid recorded at This order is fully executed and removed.
  • B - $17 ask amount reduced from 13 to 9
  • C - trade added to the trade tape @

The latest reported price is $17

The earliest time for a $17 bid on order is now D

Execution 2

  • E - the order for 6 apples @ $17 is fully executed and removed.
  • F - the $17 ask’s amount reduced from 9 to 3
  • G - a trade recorded @

The last standing bid is now 3 apples for $17 written at F

The latest reported price is $17

Execution 3

  • I - the bid order for 3 apples @ $17 is fully executed and removed.
  • J - the remaining $17 ask is removed.
  • K - a trade recorded @

The seller’s order is now fully executed.

The latest reported price is $17

Execution Summary

After execution:

  • the bids @ $17 are fully removed
  • the sell order is fully removed

Trade tape was updated three times with the same price $17 but different timestamps.

Conclusion

Lessons 17 and 18 demonstrate the same rule applied to opposite sides of the book.

When multiple eligible orders share the same price, price no longer determines execution order.
In those cases, execution proceeds strictly according to arrival time, starting with the earliest recorded order.

This rule applies identically to asks and bids.
There is no separate “buy-side” or “sell-side” timing rule.

Although the execution price may remain unchanged across multiple execution steps, each step is recorded as a separate trade.
The trade tape records discrete executions, not a single continuous event.

When several consecutive trade records appear at the same price, it indicates that multiple executions occurred at that price over time.

Together, these lessons complete the definition of price priority and time priority used throughout the remainder of the tutorial.