If the stock market is changing so fast, and by the time your buy limit order of $132.60 arrived at the brokerage, the stock is at:

bid: 132.40
ask: 132.50

Then what price would you get? The system might "give you the best price" but at the same, tries to give the seller the best price -- is there a written rule in this situation?


In the US, NBBO is the lowest ask price (sellers) and the highest bid price (buyers) on the order book across multiple exchanges. If you place a buy order that meets or exceeds the ask price, you will get filled at the ask price for the quantity of shares available at the ask price.

So if the B/A quote is $132.40 x $132.50 with a size of 4x7 (400 shares bid and 700 shares offered) and you place a limit order to buy 500 shares, you will get 500 shares at $132.50.

If you place a limit order for 1,000 shares at $132.50 then you'll only get 700 shares if no other seller comes in at that price.

If you place a market order then you'll get 700 shares at $132.50 and another 300 shares at a higher priced sell order on the order book.

And FWIW, the title of your question asks about the bid being higher than the ask but in the body of the question, it's the opposite.

  • I find this answer confusing. The question is about bid $132.60 vs ask $132.50. Is it executed at $132.50 because the ask order was first? If the bid order was placed first, would it be executed at $132.60 ?
    – 0xF
    Sep 9 '20 at 16:17
  • Read the question again. It is about a buy order placed at $132.60 when the bid is $132.40 and the ask is $132.50. Sep 9 '20 at 16:49

The order will be filled at whatever price was in the market first. In this case, 132.50.

However, if the buy order size is larger than the sell order, then the remaining portions of the order may be filled at a higher price.

For instance if the order book is

bid: 132.40 order size 1000
ask: 132.50 order size 500
ask: 132.55 order size 500
ask: 132.60 order size 5000

and you place a limit order to buy 2000 shares at 132.60, then you will buy 500 at 132.50, 500 at 132.55, and 1000 at 132.60, for an average price of 132.5625.

  • so this "what is there first rule" generally is applied to NYSE, NASDAQ, and perhaps even most exchanges in the world? I think it sets a standard for what the rule is, vs in real life, if a noodle place said, "noodle, $8.50", and you think it is well worth its value, and you say, "that's ok, make it $9", then it can also make sense the seller gets the best price, which is $9, so it is just one simple rule that everybody goes by for what happens at the stock exchange? May 18 '20 at 17:23

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