l couldn't find any information about matching two market orders. l hope l can find some answers from ET. A market order can execute against a market order?
Hmm, how could this be possible? Wouldn't an order book have to be completely blank for a market order to sit there and not get filled?
If it goes to exchange, your market order will take liquidity from the passive order residing on the book. It’s possible for two market orders to be crossed against each other by the broker (internalized). There was a nice post here on ET recently on how PFOF works which explains internalization.
Two opposing market orders can't be natively matched together since one will be hitting the bids and the other will be lifting the offers. Even if the order book is empty on both side (an extreme case) and it happens that both opposing market orders arrive at the exchange at exactly the same time, both won't execute as they won't be able to come to a price to execute at. As qlai mentioned, it's possible to internally match 2 market orders by a broker or a market maker.
Market makers are required to maintain two sided quote while the exchange is open. They just widen the spread to 0.01x19999.99 if they don’t want to quote at all. I think this is what happened during the flash crash, people were selling blue chip stocks for 0.01 lol
True, practically the order book can't be empty unless the market maker is out of business on an intraday basis and decides to shut down, lol.
market orders match best price so market order sometimes execute far from where order is entered. for example if the order book is empty on one side and atm one market order is activated then doesn't executed against the other market order coz need to match best price. the below screenshot which shows 20 sec NQ future candle and the volume is really so high and 2400. NQ is liquid market.l have a curiosity about scenario of this candle. how it happens in short time. l can also show similar volume in 1 sec candle.
%% Exactly + depends on the market. I asked[offered], not an order ''want to buy some .222 Remington/brass?/ Dealer said; 222/222 MAN i have not sold .222 in 15 years / i was shell shocked so to speak. After some time i said \ want to give $5.000 for them[cash] He says yes + hits my bid of $5.00o The story goes many market makers did NOT answer the phone in 1987\ but the phones were so busy /most selling \they maybe did the best they could.................................................................................................[NOTa market maker/ but i did read ./reread Market Makers Edge, by Joshua Likeman/MS Lukeman is spelling corrected./
I read all of the responses. Maybe 2 two somewhat simultaneous orders with +100ms latency? But honestly, I don't understand either.