Execution
How your order actually fills: speed, price and reliability decide real costs.
Execution is how well your orders fill: speed, slippage and reliability. Across hundreds of trades it matters more than the advertised spread.
Execution is the process and quality of filling your orders: how fast, at what price versus quoted, with what rejection rate. Good execution means instant fills at shown prices; bad execution means slippage, requotes and mysterious delays. Over hundreds of trades, execution quality outweighs headline spreads.
How It Works
- Market orders prioritize speed over price
- Limits prioritize price over certainty
- Venues differ wildly in news conditions
Trading Tips
Measure your slippage monthly per venue
Test execution with small size before committing
Leave venues with chronic requotes
Execution Example
Say two brokers quote identical 0.5-pip spreads, but yours slips 1 pip average on news while the alternative slips 0.2. Over 200 news trades a year on standard lots, that 0.8-pip gap costs roughly $16,000. Same quotes, different business.
How Traders Use Execution
Audit execution quarterly with your own fill logs, not broker marketing. Pay for quality fills before chasing raw spreads: a cheap quote that never fills is the most expensive one.
Related Terms
Put Your Knowledge Into Practice
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