Educational material from 
What you will learn
- Calculate an average execution price across two levels.
- Explain the opposite directions of buy and sell limits.
- Distinguish a partial fill from a promise of future execution.
Ten shares do not fit at the first price level
The fictional sell-side list has four shares at SEK 100 and six at SEK 101. We assume those orders are available to you in that sequence, without competing orders, fees or price changes. Buying ten shares therefore uses both levels. A last price of SEK 100 would not make all ten available there.
The market order in this model costs 4 × 100 + 6 × 101 = SEK 1,006. Its average is 1,006 / 10 = SEK 100.60 per share. In reality, available prices can change before and during execution. This calculation illustrates a specified scenario rather than guaranteeing a future fill.
If the table does not fit, scroll it sideways.
| Ask price | Number of shares | Amount |
|---|---|---|
| SEK 100 | 4 | SEK 400 |
| SEK 101 | 6 | SEK 606 |
| Total | 10 | SEK 1,006 |
A buy limit sets the maximum permitted price
A buy order for ten shares with a SEK 100 limit permits only the first level in this model. Four shares are bought for SEK 400 and six remain unfilled. That remaining quantity is not another completed transaction. Whether the remainder stays active depends on the order’s duration and conditions; later execution is unknown.
A buy limit of SEK 101 permits both levels. The model buys four at SEK 100 and six at SEK 101, costing SEK 1,006 altogether. The limit is a ceiling, not an instruction to pay exactly SEK 101 for every share. A permitted better price remains possible.
A sell limit works as a floor
A sell limit specifies the minimum permitted price. A SEK 99 sell limit can in principle execute at SEK 99 or higher, whereas a SEK 99 buy limit can execute at SEK 99 or lower. The same number therefore sets opposite boundaries depending on whether you buy or sell.
If there are not enough counterparties within the boundary, an order can fill partially or not at all. A chart showing that a price passed your limit does not prove your whole order would have filled: available quantity, timing and queue position also matter. Our model leaves out those competing processes.
Record the quantity, boundary and unfilled remainder
For each scenario, write down requested quantity, filled quantity, each execution price and remaining quantity. Calculate the average price using the shares actually bought or sold. Do not divide a payment for four shares by the ten you originally wanted, since that produces a misleading price.
The exercise helps you understand order terms and reason about execution. Continue with spreads and liquidity or plan another knowledge exercise with Investiq’s lesson guide. This text does not confirm particular order types in Investiq; a real service’s order conditions need to be checked within that service.
Try it yourself
A separate bid-side list has buyers for three shares at SEK 99 each and then five at SEK 98. You want to sell six shares. What does a market order return in the frozen model? How much executes with a SEK 99 sell limit?
Show the solution and explanation
The market order returns SEK 591, averaging SEK 98.50. The SEK 99 sell limit fills three shares for SEK 297; three remain unfilled.
Sell three shares at SEK 99 and three at SEK 98: 297 + 294 = SEK 591. The average is 591 / 6 = SEK 98.50. The SEK 99 boundary excludes the SEK 98 level, so only 3 × 99 = SEK 297 executes immediately under the model’s assumptions.
Check your understanding
Must every share be bought exactly at the buy limit?
No. A purchase can also execute at a lower price within the limit.
Does a limit order promise to fill the entire quantity?
No. It constrains price, but counterparties or available quantities may be missing.
Practise with virtual money
Try what you just learned in a practice portfolio with virtual money. You don't deposit any real money.
How the practice portfolio worksKeep learning and practising
More lessons on this topic
Trading, risk and benchmarks
Sources and examples
- Investor.gov: market orders and uncertain execution prices
- Investor.gov: price boundaries in limit orders
The sources support the factual explanations. Calculations and exercises were created for this lesson. Amounts and price changes are invented unless stated otherwise.
This material is educational and does not recommend securities to buy. A simulated result does not guarantee a future result.
