Order Execution
Order Types & Execution
Order execution is the process of completing a buy or sell instruction in the market, whose speed and quality directly affect slippage and trading costs.
What is order execution?
Order execution refers to everything that happens between a trader submitting a buy or sell instruction and that instruction actually being completed in the market. It covers the speed of processing, the price at which the order finally fills, and how the broker’s systems and liquidity sources handle the request behind the scenes.
The two broad execution models
Brokers generally handle orders in one of two ways:
- Market execution — the order fills at the next available market price, with no requotes, though the fill price may differ slightly from what was requested.
- Instant execution — the order fills at the exact requested price, or the broker issues a requote if that price is no longer available.
Both models can produce slippage or delays under fast market conditions; they simply resolve a moved price differently.
Why execution quality varies
Execution quality depends on factors including how the broker sources liquidity (its own dealing desk versus external liquidity providers), the technology connecting the trading platform to pricing servers, and overall server capacity during high-volume periods such as major news releases. A broker with strong execution will typically fill most orders close to the quoted price, with minimal delay, even during volatility — while a weaker one may show wider slippage, more requotes, or slower fills at the same moments.
Worked example
Two brokers both quote EUR/USD at 1.0850/1.0852. During a calm period, both fill a market buy order at 1.0852 almost instantly. During a high-impact news release, Broker A fills the same order at 1.0854 within a fraction of a second, while Broker B takes noticeably longer and fills at 1.0858. That two-pip gap under identical conditions is a direct measure of execution quality.
Why it matters
Execution quality is one of the most practical, checkable differences between brokers — arguably more important over time than the headline spread alone, since poor execution erodes returns trade after trade. Independent execution statistics, regulatory reports, and real user reviews are better guides here than marketing claims; see FinPip’s broker reviews for execution notes alongside verified spread and regulation data.
Trading carries a high level of risk and may not be suitable for all investors.