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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
The completion of a buy or sell order.
Why It Matters
Execution quality affects your returns. Fast execution at a good price saves money; slow execution at a bad price costs you. Brokers compete on 'price improvement' - getting you a better price than the quoted bid or ask. For active traders, milliseconds and fractions of a cent add up. For long-term investors, it matters less.
Key Points
- Price improvement: When you get a better price than expected - good brokers do this regularly
- Execution speed: Market orders on liquid stocks execute in milliseconds
- Best execution: Brokers are legally required to seek the best reasonable terms for your order
Related Terms
Common Questions
The completion of a buy or sell order. Execution quality affects your returns. Fast execution at a good price saves money; slow execution at a bad price costs you.
Execution quality affects your returns. Fast execution at a good price saves money; slow execution at a bad price costs you. Brokers compete on 'price improvement' - getting you a better price than the quoted bid or ask. For active traders, milliseconds and fractions of a cent add up. For long-term investors, it matters less.
Price improvement: When you get a better price than expected - good brokers do this regularly
Execution speed: Market orders on liquid stocks execute in milliseconds
Best execution: Brokers are legally required to seek the best reasonable terms for your order