One Order Can Execute Across Multiple Prices
This lesson revisits the multi-price execution shown in Lesson 12 applying it to the sell side of the book.
Unlike Lesson 13 which introduced the sell-side mechanics in full detail, this lesson exists only to confirm that no additional rules appear when the direction is reversed
We continue from the book state at the end of Lesson 13. The book already contains multiple resting bids at different prices.
No new rules are introduced.
The same
price-first, time-second
logic applies.
The bids differ by both price and arrival time
Stage 1. A Sell Order Arrives
Event: At a seller submits an order to sell 14 apples at $15
The sell order can be matched against bids at
$16
and
$15
under price-priority rules.
Execution can proceed.
Stage 2. Execution Proceeds by Price Priority
The same rules as before apply:
- Orders at better prices execute before orders at worse prices.
- Time is consulted only when prices are equal
Execution occurs in two steps.
Execution 1
The highest bid price is
$16
2 apples are exchanged at
$16
- A - the sell order is reduced from 14 to 12 apples.
- B - the bid at $16 is fully removed.
- C - a trade record for 2 apples @ $16 is added at
Execution 2
After the $16 bid is removed, $15 becomes the highest remaining bid price.
5 apples are exchanged at $15
- D - the bid at $15 is fully removed.
- E - the sell order is reduced from 12 to 7 apples.
- F - a trade record is added at $15
After Execution
The sell order is partially executed and remains open with 7 apples at $15
The bids at $14 and $9 remain unchanged.
No further execution is possible because remaining bids are priced below the ask price.
A Crucial Clarification
The sell order was submitted at $15 but execution began at $16 the highest bid price available.
Execution stopped at $15 because no bids remained at or above the ask price.
The sell order was only partially executed.
The remaining
7
apples stay open in the book.
The latest reported price is now $15 the price of the most recent completed trade.
The latest reported price reflects where execution finished, not the best price that occurred earlier during execution.