What happens when you place a buy
order trade, and it fills?

This is an overview of the step-by-step process of what happens when you trade shares, who does what, and why each step matters.

PHASE 1: ORDER CREATION

You place a Buy order to BUY 100 Commonwealth Bank (CBA.ASX) shares.

What your broker (Trade for Good) does:

Validates your order

Checks that you have sufficient funds/credit in your account or available margin
Verifies order details are correct (ticker symbol, quantity, price type)
Ensures you’re not breaching trading rules (e.g., pattern day trading limits, position limits)
Confirms the security is available for trading (not halted or suspended)
Validates that the order parameters meet exchange requirements (e.g., minimum parcel size, tick size)
Electronically, it sends the broker’s Direct Market Access (DMA) or Smart Order Router

Assigns an order ID

Unique identifier for tracking throughout the entire trade cycle
Allows you to modify or cancel the order before execution
Creates an audit trail for regulatory compliance and record-keeping
Routes the order to the exchange
Sends electronically via the broker’s trading system to
Direct Market Access (DMA) or Smart Order Router
Order is encrypted and securely transmitted to maintain market integrity

PHASE 2: ORDER ROUTING & MATCHING

What THE EXCHANGE (ASX) does:

Receives the order

Order enters the ASX or CBOE matching engine
Time-stamped for priority determination
Joins the order book for CBA shares alongside all other active orders

Order Book Matching

Your buy order is matched against existing sell orders using sophisticated algorithms
Price-time priority rules apply: best price first, then earliest time at that price level
If market order: matches immediately at the best available price, potentially across multiple price levels
If a limit order: waits in the queue for a matching price, it may receive partial fills
If conditional order (e.g., stop-loss): waits for the trigger condition before entering the matching process
Market depth shows the volume of buy and sell orders at various price levels

PHASE 3: EXECUTION

Your buy order: 100 @ Market
→ Matches with 100 @ $115.00 (best ask)

Trade Execution

Match confirmed between your buy order and the corresponding sell order(s)
Execution price determined based on the matched orders (could be single or multiple price levels)
Both buyer and seller receive immediate electronic notification
Trade details are recorded in the exchange’s permanent audit trail

PHASE 4: CONFIRMATION

Trade Confirmation is Sent

Confirmation sent back to your broker and broker within milliseconds
Published to market participants, data vendors, and news services
Volume and price information becomes part of the public market data

What YOU see:

Order status changes to “Filled” in your trading platform interface
Confirmation alert is displayed in Trade for Good software (pop-up, notification)
CBA holding appears in your portfolio (initially showing as “pending settlement”)
Trade appears in your account history with full details: time, price, quantity, brokerage

Trade Confirmation – BUY

Stock: CBA (Commonwealth Bank)
Quantity: 100 shares
Price: $115.00 per share
Gross Value: $11,500.00
Brokerage: $11.50 (0.10% with minimum/maximum applied)
GST on Brokerage: $0.82
Total Amount: $11,512.32

This confirmation serves as your legal record of the transaction and is required for tax purposes. It contains all the information you’ll need for capital gains tax calculations when you eventually sell.

Your HIN Status:

Before Settlement (T+0 to T+1):

Your HIN: X0009876543
CBA shares: 0 (showing 100 pending in your portfolio)
Status: “Unsettled” or “Awaiting Settlement”

After Settlement (T+2):

Your HIN: X0009876543
CBA shares: 100 (fully owned and legally yours)
Status: “Settled” – you can now sell these shares
Ownership is registered in your name on the company register

Time: Background process occurring continuously over 2 business days, coordinated between multiple systems and participants

Stockmarket Knowledge

This is one of the Stockmarket Knowledge Education articles, which delve into the processes and roles involved in online share trading on the ASX. It will show you who does what, why, when, and how monies are taken or paid during settlement.

Click on the subjects below to open the educational content.

Who does what, when trading?

When a trade fills when, can you expect the settlement?

The Bottom Line

The journey from placing a trade to owning shares involves a carefully orchestrated two-day process between your broker, the ASX, and ASX Clear. While trading feels instantaneous, the T+2 settlement cycle ensures secure transactions. Understanding this timeline helps you manage funds effectively and set realistic expectations about when shares transfer to your HIN and payment debits from your account.