NYSE Arca maintains an electronic file to display and match orders, which are handled using three processes:
Display Order Process — Market orders or marketable limit orders are instantly matched with the book orders that represent the best market price. Non-marketable limit orders are posted to the book. Limit orders have the highest priority in the book, followed by working orders, then tracking orders.
Working Order Process — Working orders that cannot be matched against the ArcaBook are eligible for matching with non-displayed NYSE Arca interest — such as the non-displayed portions of reserve orders and discretionary orders.
Smart Order Routing — If the best price isn’t available on NYSE Arca, the order can be automatically routed to another market center using our smart order (SmartBook®) routing algorithm.
Limit orders are ranked and maintained in each process based on order type. For example, a limit order is stored in the Display Order Process. The displayed portion of a reserve order is ranked in the Display Order Process, while its reserve portion is filed in the Working Order Process. This allows all orders to be organized by time of entry, adhering to our price-time priority.
The order book operates on an open basis. Orders at all price levels in the Display Order Process of the ArcaBook will be displayed to all users and other interested parties on an anonymous basis unless they are designated as attributed quotes. The best-ranked displayed order(s) to buy and sell in the Book and the corresponding aggregate size of these orders associated with such prices will be collected and made available to quotation vendors.
For the complete NYSE Arca routing policy, click here.