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When I start an order, especially for those with high liquidity during market hours (comparing to pre-market/after-hours trading), the order will be immediately filled.

How's the system match the buyer/seller? Is that totally random? Is it possible for the order-initiator to control the other side? Like to whom I want to sell, to whom I don't.

Thanks,

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    Is this an order to sell (or buy) at the market price or at a specific price? No, you have no control over who will fill your order. – Dilip Sarwate Dec 6 '14 at 15:06
  • ... and generally you don't have any reason to care. If it sells for (at least) the price you've set, it sold at that price; who bought it is irrelevant to the transaction. (Except in some very special cases, such as struggles over control of the company. But in that case you either wouldn't sell until the issue is resolved, or you'd find someone on "your side" and sell to them directly rather than going through the market.) – keshlam Dec 6 '14 at 17:30
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It depends on the market and how you are trading but in general in most large exchanges you have no control over who is on the other side of the trade.

What happens is either market makers or just other participants have standing quantities at certain prices that they are willing to buy or sell at. When you tell your broker to buy. She sends the order to the exchange and the exchange will fill the order starting with the cheapest price until it has filled as much of the order as it can then going to the next cheapest price and onward. So it is not really random as you always buy from the cheapest offer and sell to the highest bid. Though it can look random as who has the cheapest offer can change extremely quickly in liquid products.

In general, exchanges are there to get you the best price because most people don't care who they sell to/buy from. They just care about the price. If you want you can try to sell/buy to a particular entity off the exchange and in that case you keep control.

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Your broker may not give you access to this but you can control what route your order goes. Route dictates what exchange your order gets sent to.

There can be liquidity on the Nasdaq, or ARCA, or BATS, or CBOE, or the NYSE, or on EDGEA, EDGEB, EDGEX. These are all market makers and other people's orders generally go to their books, since the capital markets are not yet peer to peer or even broker to broker. (If the markets become peer to peer you wouldn't need a broker)

Your broker fills your order on the exchange offering the best prices.

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