How does a limit order book turn a stack of bids and offers into a trade? This note explains the match, using the continuous book in Apple shares as the public example, and separates a trade from a view about the company.
A book is a queue at each price
In continuous trading, a limit order book stores buy orders and sell orders that have not yet traded. They are arranged by price, and at each price they wait in an order the venue's rule defines, often the order in which they arrived. A bid is a resting buy. An offer is a resting sell. The highest bid and the lowest offer are the inside of the book. The distance between them is the spread. Nothing has traded merely because those two prices exist. A trade happens when an incoming order is willing to meet a resting one, or when two prices cross under the venue's rule.
The incoming order can be limited or marketable. A limit order that does not reach the other side joins the queue and waits. A marketable order walks the queue: it takes the best price first, then the next, until its size is filled or its limit stops it. The book clears in the small sense that those resting shares are removed and reported as a trade. The rest of the book stays. Clearing here is not the end-of-day settlement process. It is the match that turns orders into a print.
A limit order book clears a marketable order by matching it with resting orders in the venue's priority, consuming size at the best prices first, and leaving the remaining queue in place.
Apple, one marketable buy
Apple shares on Nasdaq are a familiar public book. Suppose the best bid is 150.00 and the best offer is 150.01, with size at each. A marketable buy that demands more shares than the offer is displaying will take the 150.01 size and then look at the next offer above it. The print or prints that result are the match. Sellers who were resting at those prices are filled according to the queue. Sellers who posted a higher price are untouched. A reader who sees only a last-trade price has missed the queue that produced it.
A limit buy at 150.00 does not clear the offer. It stands behind other bids at 150.00 or in front of worse bids, according to the arrival rule. It may trade later if a seller hits it. Until then it is a statement of willingness, not a transaction. Confusing the two is how people talk about the book as if every displayed price were a trade. Displayed prices are invitations. Trades are invitations that were accepted under the venue's priority.
Auctions are a different clearing. At the open and at the close, many venues batch orders and find a single price rather than walking a continuous queue. Applying the continuous story to Apple's closing auction will mis-explain the print. This note is about the continuous book only. The auction has its own purpose and its own rule, and it should be read as that other mechanism rather than as a very large trade in the same queue.
What the match leaves unsettled
A cleared trade does not say why the buyer arrived, whether the price is fair, or what the next order will be. It says that under a published priority, size met size. Two observers with two feeds may even disagree for a moment about the exact book, which is a data question sitting on top of the mechanism. The mechanism itself is the queue and the rule for walking it.
Apple is the example because the share is widely quoted and the continuous book is easy to picture. The same sketch applies to any venue that posts a price-time queue and matches marketable orders against it. The sketch does not recommend buying or selling. It is the vocabulary required before words like spread, impact, and imbalance refer to anything definite.
This piece does not claim that a displayed book is the whole market, that a trade reveals a motive, or that any order should be sent. It describes how a public continuous book turns resting orders and one incoming order into a print.
