simplistically, the exchange manages an "order book", which records the amount each person wants to buy or sell, the price at which they are willing to trade, a

simplistically, the exchange manages an "order book", which records the amount each person wants to buy or sell, the price at which they are willing to trade, and the time the order is received. if there is enough "buy" volume at a given price to fill a given "sell" volume, then a trade happens. the price of the latest trade is the "market" price. this happens for every order that has a volume and price matched "other side" of the trade. there are many orders that are above or below the current market price. those wont get cleared until the trades that are closer to market clear, and they may not get cleared at all if the market moves the other direction