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If a Buyer submits an order for buy price of $10 and a Seller submits an order to sell at $8 - does the price sell at the Buy or the Sell price?

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That depends on the order of the orders.

If the buyer submits first, there is a buy order of $10 in the order book, and the sell order gets fulfilled immediately at $10.

If the seller submits first, there is a sell order of $8 in the order book, and the buy order gets fulfilled immediately at $8.

But maybe I should phrase it differently and in a more general way:

If an order is placed which cannot be fulfilled, it is placed into the order book. There should be no difference between different exchange systems.

If it can be fulfilled with an already existing order in the order book, the price is usually the one in the order book, but here there might be differences between exchange systems - maybe the NBBO system in the USA works slightly different.

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  • Thank you sooo much. Normally google gives you a whole wad of answers said in different ways but I could not get this answer on google at all. Very appreciated.
    – Sjh
    Commented Nov 4, 2022 at 22:41
  • As written, this makes no sense to me. Can you provide an NBBO quote that supports your answer? Commented Nov 5, 2022 at 0:38
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    @BobBaerker: Makes sense to me. This is a hypothetical, implicitly assumes no other bids or asks exist, or equivalently, there are market makers but they are setting a huge price spread, say where the NBBO is ($6 bid, $12 ask). If the buyer gets in first, the buy can't be satisfied so goes into the book at $10 giving NBBO of (10,12); similarly, if seller is first, the NBBO becomes (6,8).
    – mgkrebbs
    Commented Nov 5, 2022 at 1:29
  • It's a ridiculous scenario to suggest that there is a public stock and no bids or asks exist. Be that as it may, your explanation makes sense because it offers a specific NBBO quote where this is theoretically possible... but it is untethered from reality. Commented Nov 5, 2022 at 3:12
  • @BobBaerker Maybe that's an unrealistic scenario, but it describes the mechanism. (And I did never say there weren't sell orders at $11, $12 etc. and/or buy orders at $7, $6 etc., but they are not relevant for this.
    – glglgl
    Commented Nov 8, 2022 at 6:50

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