How do Bitcoin exchanges fill orders?

Question

If the order book looks like the following…

A)  Ask: 2 bitcoin at $100

B)  Bid: 2 bitcoin at $100

A trade will be done from A to B.

But what happens in the following situation:

C)  Ask: 1 bitcoin $100

D)  Bid: 2 bitcoin $100 

Do bitcoin exchanges partially fill orders?

Does one of the following occur:

• Nothing the orders need to be the same quantity.
• Does the trade occur for one bitcoin.
• If the trade does occur, what happens if the bid is cancelled? Is the trade for 1 bitcoin still valid.

Also, what happens in this situation:

E)  Ask:2 bitcoin $90

F)  Bid: 2 bitcoin $100

Does the Bid pay $100 or $90?

Thank You for your help

Answer 1

Q1: Yes, orders will be partially filled. Some exchanges offer advanced orders that can only be completed wholly, but that's not the default.

Q2: The deciding price is the one that entered the book first. So if first a $90 ask is placed and then a $100 bid is placed, the trade will be executed at $90.