How it unfolds, step by step
The setup
A buyer submits a limit order for 100 shares at ₹50. An order book is the list of orders waiting at each price. Six stages stand between the instruction and a settled holding. First the instruction itself. It names the security, the exchange, buy or sell, the quantity and the conditions. Then the broker's checks: the account, the funds or margin, the product and its own risk controls. Then routing to the exchange. Then matching against orders that fit. Then the trade records each execution produces. Last, clearing and settlement under the segment's own rules. Submitting the order guarantees neither a fill nor an execution price.
What happens next
Two fills arrive. Forty shares at ₹49.90, which is ₹1,996. Then thirty-five at ₹50.00, which is ₹1,750. Twenty-five shares stay unfilled. So 75 shares have been bought for ₹3,746 before costs. The average execution price is ₹3,746 divided by 75, or about ₹49.95. The exchange matches on price first and then on time. Among orders at the same price, the one that arrived earlier is filled first. That is why the market touching ₹50 does not mean this order traded.
What it means — and does not
The record shows 75 shares at an average of about ₹49.95. It does not show a purchase of 100 shares, or ₹5,000 invested. Dividing ₹3,746 by the 100 asked for would give ₹37.46, a price nobody was charged. The other 25 depend on the order's own conditions, and on what happens next in the book. Asking to cancel them does not wipe out the 75 already executed. The quantities shown in the book are not held for anybody either. They change as new orders, trades, changes and cancellations arrive. So a screenshot records one moment. It is not a claim on what will still be there.
What this does not establish
This describes the ordinary continuous session of the equity cash market. In that session, orders match against one another as they arrive. It stops applying to sessions that match a different way, such as an opening or closing auction. It does not describe every product either. Order types, validity conditions and risk checks differ by segment and by broker. It says nothing about how fast or how reliable any particular broker is. And an exchange accepting an order is not a claim about settlement. A trade record and a settled, freely available holding are two separate stages with separate rules. Neither one says anything about what the position is later worth.
Things to check
5Have you written down four separate numbers: quantity asked for, quantity filled, average execution price, and quantity left?
Is the average calculated on the quantity that filled, or on the quantity that was asked for?
Does the order status carry a timestamp for its latest update?
For a rejected order and a partly filled one, what makes neither of them a completed trade?
Track the order through checks, routing, matching, execution records and settlement.
Common mistakes
5Reporting the requested quantity as the trade. A 100-share order that filled 75 is a 75-share trade so far.
Dividing the cost of the filled shares by the quantity first asked for. That gives an average nobody was charged.
Assuming that the market touching the limit price means the order traded. Queue position and available quantity both decide that.
Believing that cancelling an order undoes the part of it that has already executed.
Reading an estimated order value on the entry screen as an executed trade value.
- ₹37.46, because ₹3,746 is spread across the 100 shares requested
- ₹49.95, on the 75 that filled
- ₹49.95 on the filled part, though the order still counts as a 100-share purchase until it is cancelled
Show the answer
B. ₹49.95, on the 75 that filled
The average is the money spent divided by the shares that actually filled. ₹3,746 over 75 is about ₹49.95. Dividing by the 100 asked for gives ₹37.46, a price nobody was charged. The third answer keeps the quantity asked for alive in the report. A trade is only what executed, and 25 shares that never traded are no part of it.
Frequently asked
3Can one order create several trades?
Yes. Different parts of it can execute against different matching orders, at different prices and at different moments. That is how one instruction produces an average price rather than a single price.
My limit was touched. Why did nothing fill?
Price alone does not decide it. Other orders may have been ahead in the queue at that price. The selling quantity on offer may also have run out before the queue reached that order.
Does cancelling an order cancel the trade?
No. A cancellation normally applies only to the quantity still outstanding. Whatever has already executed is a trade. It follows the normal clearing and settlement path.