Marketable limit order
Family II · Orders
Not to be confused with limit order, stop limit order, sell limit order.
Marketable limit order is a limit order priced to trade at once rather than to rest in the book. A buy limit at or above the best offer, or a sell limit at or below the best bid, is marketable because it crosses the spread on entry. The limit price still defines the worst price the trader will accept, but execution is expected immediately against available resting orders.
How marketability is determined
An order is marketable when its limit price is at least as aggressive as the best quote on the opposite side of the book. For a buy order, that means a limit price equal to or higher than the best ask; for a sell order, a limit price equal to or lower than the best bid.
- If the limit price is inside the spread but does not cross it, the order is not marketable and rests as a passive quote.
- If the limit price crosses the spread, the order is marketable and can execute against the best available prices.
- Any unfilled remainder after the marketable portion executes rests in the book at the stated limit price.
Marketability is a property of the order relative to the current quote, not a separate order type. The same limit order can be marketable at one moment and non-marketable the next as quotes move.
Worked example
A trader wants to buy 1,000 shares and is willing to pay up to 50.10. The best ask is 50.05 for 600 shares, followed by 50.08 for 500 shares.
The limit of 50.10 is above both asks, so the order is marketable and executes immediately. The remaining 100 shares rest at 50.10. Had the limit been 50.04, the order would not have crossed the 50.05 ask and would have rested passively instead.
Execution and price limits
Because a marketable limit order takes liquidity, it is generally subject to taker fees or, under some fee schedules, a different rebate treatment than a resting order. It also risks partial fills: only the size available at or better than the limit price executes, and the rest joins the queue.
Marketable limit orders are distinct from market orders because the limit price prevents execution at prices worse than the stated level, which matters in fast or thin markets. They are also distinct from pegged or discretionary orders, which adjust their price automatically rather than being priced to cross at submission.
Often confused with
- limit order
- A limit order may be priced away from the market and simply rest in the book without any expectation of immediate execution; the visible sign is whether the limit price crosses the current opposite-side quote.
- stop limit order
- A stop limit order remains dormant until a stop price is touched and only then becomes a limit order, so it is not marketable at submission; the visible sign is the presence of a separate stop price alongside the limit price.
- sell limit order
- A sell limit order is defined by its side and can be either marketable or non-marketable, whereas a marketable limit order is defined by its relationship to the current quote; the visible sign is whether the sell limit price sits at or below the best bid.