How is a trade executed?

When the investor submits the trade, it is sent to a broker, who then determines the best way for it to be executed. Execution refers to filling a buy or sell order in the market, subject to conditions placed on the order by the end client. There are several ways to execute a trade and they encompass manual as well as automated methods.

What does executing a trade mean?

Execution refers to filling a buy or sell order in the market, subject to conditions placed on the order by the end client. There are several ways to execute a trade and they encompass manual as well as automated methods. Brokers are required by law to find the best possible means to execute a client's trade.

How does a broker execute a trade?

The investor's broker may direct the trade to one of these market makers for execution. Electronic Communications Network (ECN): An efficient method, whereby computer systems electronically match up buy and sell orders. Internalization: If the broker holds an inventory of the stock in question, it may decide to execute the order in-house.