Execution - Stock Trader Glossary

Execution is the process of completing a buy or sell order for a financial instrument such as a stock, bond, or option. When an investor places an order to buy or sell a financial instrument, the order is routed to a broker or a trading venue for execution.

Execution can take place in different ways depending on the type of order and the trading venue. For example, a market order is executed at the best available price at the time the order is received, while a limit order is executed only if the price reaches a specified limit.

The speed and accuracy of execution are important factors for investors, particularly for day traders who seek to make quick trades based on market movements. In addition, the cost of execution, including commissions and fees, can vary depending on the broker and the trading venue.

In summary, execution is the process of completing a buy or sell order for a financial instrument. Execution can take place in different ways depending on the type of order and the trading venue. Speed, accuracy, and cost are important factors to consider when choosing a broker and a trading venue.