In continuous trading, what is essential for order execution?

In continuous trading, the core principle that underpins order execution is the priority of orders based on an established method. This encompasses the structure and mechanics of how orders are matched and executed in the market. Proper order fulfillment requires adherence to a systematic approach that determines which orders are executed first based on specific criteria, such as price and time of order entry.

Order priority is crucial because it ensures a fair and orderly market, allowing participants to effectively manage their trades. In many systems, limit orders are prioritized over market orders, and within the same order type, the first orders entered (first-in, first-out) are usually executed first. This orderly framework promotes liquidity and market efficiency.

The other options do not capture the essence of order execution in continuous trading. Although market makers play a significant role, they do not have an absolute obligation to ensure all orders are executed. Trades occurring at the last available price is not a requirement; execution can occur at different prices based on current market conditions. Moreover, stating that only limit orders can participate excludes other order types that are also relevant in continuous trading environments, such as market orders. Therefore, emphasizing order priority based on a standard method provides the most accurate representation of what is essential for effective order execution in continuous trading.