So I have been watching a lot of live trading videos and have been wondering how a limit order would work when you are seeing Level II sellers. Here is the scenario: You have a limit order for stock XYZ. Your limit order is 2000 shares at $15. However, you see only one seller at $15 (Level II) and he has only 1000 shares at that price. Does the broker fill your order for 2000 shares and pickup the difference from the sellers beyond $15? Or does your limit order not get filled? I am also aware that many buyers and sellers use discretionary orders and that Level II is not always displaying whats really being offered and sold. But, for the sake of the scenario, the seller is actually holding 1000 shares, thanks.
From what I recall, and I could be very wrong, but isn't there an option which accounts for this in that when the trade is entered, you can select "all or none"? I would imagine that this way, if this is how you entered the order, if you can't get 2000, then you won't get any. And if you don't have the order entered this way, then you would pick up 1000 at $15 but not get your entire order filled.
I think that no matter what you see. If you buy a big ammount the most probably you will first front run and only a part of your order will be filled. I have heard that your order could be flashed to let HTF income to fill your order protecting the price.