A New Trade Does Not Require a New Prices
At this point, the reported price is $11 set by the last recorded trade.
The book currently contains:
- one bid below the reported price
- no asks at that price
A New Ask Arrives
Event: At a seller submits an order to sell 2 apples at $11 each.
The order is recorded in the asks ledger.
No trade has occurred yet.
The reported price remains $11
The appearance of an ask at $11 is unrelated to the previously recorded trade at $11 It is simply a new order written into the book.
A Matching Buy Order Arrives
Event: At a buyer submits an order to buy 2 apples at $11 each.
The order is recorded in the bids ledger.
What happens
The incoming buy order is priced at
$11
which matches the existing sell order priced at
$11
The quantities also match.
Because the buy and sell prices overlap and sufficient quantities exist on both sides, a trade can occur.
Executing the Trade
Two apples are exchanged at $11 per apple.
As part of this execution:
- the matched sell A and buy B orders are removed from the book, and
- the trade is written to the trade tape C with timestamp.
What Happened — And What Did Not
A trade has been executed and written to the trade tape.
The reported price remains $11
Although this trade occurred at the same price as the previously recorded trade, it is a separate execution
It does
not
extend the earlier trade.
It is
not
caused by the earlier trade.
It is recorded separately because a new exchange occurred at a later time
Execution time matters each execution is defined by when it occurs, not only by the price at which it occurs.
If the earlier trade had been recorded at $10 or $12 this execution would still occur in exactly the same way.
The previously reported price played
no role
in execution.
Only the orders written in the book at the moment of order arrival mattered.
The trade tape now contains multiple trades recorded at $11 each, with its own execution time.
All of these entries remain in the tape as historical records.
Only the most recently recorded trade determines the
current market price
Each trade tape entry represents a distinct execution event not a continuation or extension of a previous trade.
Conclusion
A new trade can occur even if its execution price is the same as the price of a previous trade.
Trades are defined by execution events not by price changes. When multiple trades occur at the same price, each trade is still a separate execution if it occurs at a different time.
Price equality across trades does not create persistence or continuity. Nothing “stays active” at a price unless there are orders in the book at that price.
The trade tape records discrete execution events It does not represent a persistent market state, an ongoing transaction, or a price that remains in force.