How will a new incoming buy limit order for 20 options contracts be executed in continuous trading?

In continuous trading, buy limit orders are executed at the specified limit price or better. This means that if a buy limit order is placed, it will only be filled if the market price is at or below the limit price that the trader has set.

In this scenario, a buy limit order for 20 options contracts at a price of 3.16 will be filled if there are sellers willing to sell at that price or lower. Assuming that there are available contracts at that price and that the order can match the best available bid, the execution occurs at the limit price of 3.16. The market typically facilitates this process by matching limit orders with best or favorable available prices from sellers.

The option points to the correct execution price and volume that matches the parameters of the incoming order within the trading framework, thereby fulfilling the conditions of the limit order. Executing this order at any other price would not align with the parameters set by the buy limit order and thus would not be valid under market regulations.