During continuous trading, where is a quote matched when it meets an order with a larger volume?

During continuous trading, where is a quote matched when it meets an order with a larger volume?

• A. At quote
• B. At limit
• C. At reference price
• D. At quote already in order book

Answer: (B)

In continuous trading, when a marketable order meets an existing quote in the book, the trade is executed at the limit price of the resting order that is being hit. If the incoming order has a larger size than that resting quote, that portion is filled at the resting order’s limit price, and any remaining quantity continues to the next price level to be filled there. So the effective price for the first match is the limit price of the quote in the order book, which is why the best answer is “at limit.”

In continuous trading, when a marketable order meets an existing quote in the book, the trade is executed at the limit price of the resting order that is being hit. If the incoming order has a larger size than that resting quote, that portion is filled at the resting order’s limit price, and any remaining quantity continues to the next price level to be filled there. So the effective price for the first match is the limit price of the quote in the order book, which is why the best answer is “at limit.”