When using a limit order to buy stock, can many sellers fill your order or only one matching seller?

Answer 1

A concise answer is that it can be filled by any number of sellers at various different prices, but none above the limit price. Frequently, mine are filled by two different sellers. I do not recall ever having more that two fills though.

Answer 2

The limit order depends on a couple of things. The sahre availability and the pricing. Some brokers will only allow a limit order on a round lot (100 shares) of stock. The stock price on a listed stock must hit the limit price twice in order to execute. The first time triggers the limt and the second time triggers the buy order. The specialist filling the order simply fills them based on share availability. It is unknown how many sellers are involved. Just the number of shares. The specialist may also trade the shares out of his own account. Hope this helps.

Answer 3

Your order becomes eligible for execution as soon as the price becomes the "inside market". But there is no guarantee that the fill will be complete. That is dependent on how much interest there is in the stock at the limit price, and whether the MM or specialist wants to provide liquidity. Furthermore, you may not have the only open order at that price. Orders are serviced on a first in, first executed basis.

Your order will be filled with one or more executions against multiple sellers, as necessary to fill the order. If we are talking about a NASDAQ order, your limit order will reside with one market maker among many who deal in the stock. If your limit price becomes the inside market, the MM is responsible for providing a fill or finding the other side. But a fill of just 100 shares, and only to the first order in queue, is often sufficient to fulfill his obligation. Executions can be against the market maker's inventory or against the street. On the NYSE, the specialist will most likely fill you against the street rather than from inventory.

You can specify "all or none" if you want it filled in a single execution.

Answer 4

Muncie Birder gave you the correct answer (that a limit order can be hit by multiple trades) -- give him the points.

You got some bad information from cinsingl83. He said that for a limit order, the price has to be hit twice before your trade is executed. This is not true. The NYSE has strict priority rules. If you are the earliest person to put in a limit order at that price, then no one can step in front of you. As soon as a trade is done at that price or better, it will be your trade. It is possible that cinsingl83 was thinking about Stop Orders.

With Reg NMS becoming effective on March 5th, the same rules now apply to NASDAQ trades.