Which allocation method is used when all orders on price level are proportionally allocated according to sizes?

The allocation method that is used when all orders at a specific price level are allocated proportionally according to their sizes is pro-rata. This approach ensures that each order receives an allocation that corresponds to its relative size compared to the total size of orders at that price level.

In a pro-rata allocation, if multiple orders are at the same price and differ in size, the larger orders receive a proportionally larger share of the filled quantity relative to their size. This is particularly helpful in situations where market participants want to be rewarded based on the volume of their orders, thereby incentivizing larger trades with a fair distribution mechanism.

Other methods, such as price/time priority or volume/time priority, do not allocate based on the size of orders. Instead, price/time typically prioritizes orders based on the best price and the time of order entry if prices are the same, while volume/time priority also incorporates time but focuses on larger volumes potentially taking precedence under certain conditions. The time/pro-rata method does not incorporate size-based allocation in the same manner as pro-rata does, which is why pro-rata is the correct choice here.