Execution Definition – What is Execution? | CFI

execution

Execution in financial trading terms refers to the finalisation of an order by a trader to either buy or sell an [instrument] with a broker. In simpler terms, the order has to be completed and not just initiated. Only when the order has been [filled] is it deemed as executed.

 

By simply initiating the order, there is no certainty that the trader is entering into the trade, they are merely placing an order to either buy or sell. The broker will then in turn have to execute the order that was placed by the trader.

 

There are three main types of order execution. Firstly, instant execution or a market order - where the broker has to process an order immediately after it has been placed by the trader at the prevailing market price. The second method is a [limit order] where a trader agrees to a trade being executed at a specific price. Lastly, execution can occur at a request whereby the trader can choose to accept or reject the trade at hand.

 

Different orders will be executed at different times, for example [good until canceled] (GTC) orders can be executed at any time until the trader decides to retract the order, however, in the case of day orders they have to be executed on the day that they were placed before they expire at the end of the session or market day.

 

There are two ways in which a broker can carry out the orders, either they place this order digitally to be approved or they can submit it directly to the order books to be carried out immediately.

 

Key takeaways:

 

  • Execution refers to an order being carried out by the trader. This is applicable to both the buying as well as the selling of an instrument.
  • There are three methods of execution, namely: instant execution, market execution and execution on request.
  • Different orders are carried out at different times. Day orders have to be executed before the end of session and gtc orders are in play until a trader makes the decision to retract the order they placed.

 

Credit Financier Invest (Mauritius) Ltd is an award winning global financial markets provider with over 23 years of experience and regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads, professional services, dedicated support and powerful tools.
Credit Financier Invest (Mauritius) Ltd has regulated subsidiaries in
London • Larnaca • Beirut • Amman • Dubai • Port Louis
Credit Financier Invest

Important Disclaimer:


We would like to remind that while we endeavour to provide best possible services, CFI provides execution only services and any information, reports, opinions, commentary or other materials he receives from CFI directly or from its employees or through any analytical tools provided to him or third party research provided to him from the Company shall not be deemed as investment advice and it cannot be relied upon to make investment decisions. The Client commits to make his own research and from external sources as well to make any investment. The Client accepts that CFI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The contents of any report provided should not be construed as an express or implied promise, as a guarantee or implication that clients will profit from the strategies herein, or as a guarantee that losses in connection therewith can, or will be limited.


Forex and CFDs are leveraged products that incur a high level of risk and a small adverse market movement may expose the client to lose the entire invested capital. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and be aware of trading risks. Credit Financier Invest (Mauritius) Ltd provides general information that does not take into account your objectives, financial situation or needs. The content of this website must not be interpreted as personal advice. Please ensure that you understand the risks involved and seek independent advice if necessary.

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