In stock exchange transactions, what is the priority of orders?

In stock exchange transactions, the priority of orders is fundamentally based on the type of orders being placed. Customer orders are generally prioritized because they represent the demand and supply dynamics from retail investors or clients, which are crucial for maintaining market liquidity. When a customer places an order, it often reflects a genuine interest in buying or selling, and exchanges prioritize these to ensure that the market operates efficiently and transparently.

On the other hand, firm orders, which might include those from market makers or institutional investors, typically are executed based on specific conditions and can sometimes cater to broader market strategies than immediate customer needs. While they are important, they follow customer orders in terms of priority during execution to ensure that individual investors' interests are safeguarded.

This prioritization helps create a more client-focused trading environment and encourages active participation from retail investors, contributing to the overall health of the capital markets.