At the opening of the Central Limit Order Book, if there is a buy limit order with a limit below the reference price in addition to same-size market orders, what happens to the market orders?

At the opening of the Central Limit Order Book, if there is a buy limit order with a limit below the reference price in addition to same-size market orders, what happens to the market orders?

• A. They will be canceled.
• B. They will be matched at the reference price.
• C. They will be executed at the reference price.
• D. They will be matched at the best bid.

Answer: (B)

In an opening cross on a Central Limit Order Book, a single reference price is used to price all trades that cross the book. Market orders are matched against resting orders at that reference price, guaranteeing a fair, uniform execution price. Here, a buy limit order sits below the reference price, adding liquidity on the bid side. When the market orders cross, they are filled at the reference price rather than at their own limit or at the best bid. The limit order below the reference price remains resting on the book, but it does not set a better price for these cross trades. So the market orders are matched at the reference price.

In an opening cross on a Central Limit Order Book, a single reference price is used to price all trades that cross the book. Market orders are matched against resting orders at that reference price, guaranteeing a fair, uniform execution price.

Here, a buy limit order sits below the reference price, adding liquidity on the bid side. When the market orders cross, they are filled at the reference price rather than at their own limit or at the best bid. The limit order below the reference price remains resting on the book, but it does not set a better price for these cross trades. So the market orders are matched at the reference price.