Is Order Execution Important?
The importance and impact order execution can have really depends on the circumstances, in particular the type of order you submit. For example, if you are placing a limit order, your only risk is the order might not fill. If you are placing a market order, speed and price execution becomes increasingly important. When considering an investor with a long-term time horizon, an order for $2,000 of stock the difference of 1/16th is less than $20 – a small extra when entering a stock for the long haul. Contrast this to an active trader who attempts to profit from the small ups and downs in day-to-day or intraday stock prices. The same $20 on a $2,000 order eats into a jump of a few percentage points. Therefore, order execution is much more important to active traders who scratch and claw for every percentage they can get. Conclusion Remember, the best possible execution is no substitute for a sound investment plan. Fast markets involve substantial risks and can cause execution of orders at
