user4626: If a bitcoin exchange offers Market Orders, let's suppose there are X buy orders at market price, and Y sell orders at market price  (no limit orders):
How are these matched and at what price, since there is no "lowest or highest" price currently on the order book?

user4354: Market buy order means buy for whatever is current lowest ask. Market sell order means sell for the current highest bid. Market orders should be executed as long as there is any buyer and seller, but may not be filed for the desired quantity. In the case that there are no limit orders on either side, market maker would establish a spread for profit. In fact, market makers profit from market orders and existing limit orders spread also in ordinary circumstances.

user4083: This situation would not exist. True market orders (buy or sell) cannot just "hang" around. If they are not executed immediately against existing limit orders, then they should be cancelled. The case in which they would not be executed would be if there are no orders on the other side. In which case it depends on how the system handles the orders but it should either say it can't fill it and never place the order to begin with.

4626: <p>If a bitcoin exchange offers Market Orders, let's suppose there are X buy orders at market price, and Y sell orders at market price  (no limit orders):</p>

<p>How are these matched and at what price, since there is no "lowest or highest" price currently on the order book?</p>
 4354: <p>Market buy order means buy for whatever is current lowest ask. Market sell order means sell for the current highest bid. Market orders should be executed as long as there is any buyer and seller, but may not be filed for the desired quantity. In the case that there are no limit orders on either side, market maker would establish a spread for profit. In fact, market makers profit from market orders and existing limit orders spread also in ordinary circumstances.</p>
 4083: <p>This situation would not exist. True market orders (buy or sell) cannot just "hang" around. If they are not executed immediately against existing limit orders, then they should be cancelled. The case in which they would not be executed would be if there are no orders on the other side. In which case it depends on how the system handles the orders but it should either say it can't fill it and never place the order to begin with.</p>
