What is Stock Order Execution?Stock Order Execution is the filling of a buy- or sell order for a security in the stock market. It is subject to the limits or conditions attached to the order by the stock trader. It takes place when the order gets filled, not promptly when the investor places an order. There are numerous ways to Execute a trade and they encompass manual as well as automated methods. |
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In modern stock trading when the investor submits the trade though an online trading platform, it is sent to his or her licensed stock broker that operates the platform, who then determines the best way for execution. Brokers are required by law to find the best possible option to execute a client's order. | |||||||||||||||||||||||||||||
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Did you know? Your online stock broker account doesn't connect you directly to the stock market. When you place a trade online or as in the past over the phone, the order is prompted to a broker be it a conventional- or online broker. The method for Trade Execution employed by the broker depends on the,
» Size of the order » Availability of the underlying share Type of order placed by the investor as market order or conditional order that includes the most frequently used limit order. How long does it take for a stock order to execute? Commonly, the majority of stock orders are executed within seconds to minutes, but if there are specific instructions attached to the order (as conditional order) or in case of high market volatility, Stock Order Execution can take longer. Execution time mostly depends on the number of investors waiting to buy or sell the security in the stock market. |
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Have you ever heard?
The time of the Stock Order Execution primarily affects the profitability in Day Trading because Day Traders in general trade highly volatile stocks that can rise or fall even within seconds. Laggard execution time might cause the investor lose tremendous amount of money if security's trend changes while the order is waiting for execution. Ideally after making buy- or sell decisions, Intraday Trader's all trades are executed immediately within seconds, yet before stock price goes down or up depending it is a long trade or short trade. |
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KEY TAKEAWAYS» Stock Order Execution is the completion of a purchase or sale order for a stock.» A stock order placed by the investor online is sent to his or her licensed stock broker. » A broker is required by law to offer the best possible execution to its clients. » Numerous order conditions (e.g. limit orders) might be set when placing a stock order. » Though the most stock orders are executed within very short time, high volatility, the size of your order or the availability of the stock might result in delayed Trade Execution. » For Day Traders slow Stock Trade Execution will elevate the risk. |
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