Compare Market Execution Brokers

Looking for market execution brokers? We have compared 25 broker accounts (out of 147) that are suitable for you below.

We found 25 broker accounts (out of 147) that are suitable for Market Execution.

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Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data.

The Ultimate Guide to

What is Market Execution?

Trading financial instruments is more popular than ever. In the past, only large banks and institutions were able to trade the markets. But due to recent advancement in technology and the inauguration of high leverage trading accounts, retail traders have gained complete access to this industry. In order to be an active trader, it is essential to know that orders executed mainly in two different formats:

  • Market execution
  • Instant execution

Market Execution

In this type of execution, orders are filled at the next available market price without any requotes. Most of the ECN /STP brokers offer market execution for clients to ensure a dynamic trading environment. Many brokers offer the market execution model to their customers to ensure a trading environment without requotes.

Instant Execution

When orders are processed by the broker’s price feed, it is known as instant execution. This type of execution is often offered by market-maker brokers, and requotes are common place. This means that if the desired price level is not available at the time of trade execution, then the broker will requote with the newly available price level.

Market Execution vs. Instant Execution

Both of these models are very popular amongst the retail traders, but there are pros and cons for the two systems. The market execution model gives clients a more fluid price, and the order is guaranteed to be filled at the best available market price at the time of execution. Most of the brokers charge a small commission and/or offer a variable spread trading account for this model. However, because prices are subject to continual fluctuations, this means that the order may not be filled at the price the client had initially requested, and significant slippage can be experienced at the entry and exit points. Sometimes the slippage might go in a trader’s favour, however negative slippage can jeopardise an entire trading plan.

Compared to market execution, the instant execution model can be much slower. Typically, it can take 1-3 seconds or more to confirm orders. During high levels of market volatility, the trader will receive repeated requotes to approve before the order can be placed, making it extremely difficult for a trade to be opened at the desired price. In many cases, the instant execution model is offered for fixed spread trading accounts. Wide spreads are an indicator of large broker fees, and there is no assurance that a trader will have access to the best available price feeds in the market.

Pros and Cons of Market Execution

Pros

  1. Usually orders will be filled within a fraction of a second.

  2. No requotes, even during highly volatile market conditions.

  3. Guarantee that orders will be filled at best available market price.

  4. Positive slippage – the chance of getting a better price for the executed order than the price expected.

  5. A trading account which offers market execution typically comes with variable spreads and low commission.

Cons

  1. Slippage is common in market execution and this can often be negative.

  2. Sometimes there will be a significant deviation from the desired entry level due to high market volatility.

  3. Stop loss and take profit levels need to be set after the execution of the trade.

Pros and Cons of Instant Execution

Pros

  1. Trading costs are fixed as a fixed spread trading account is usually offered.

  2. Predefined stop loss and take profit levels can be set during trade execution.

  3. Orders can be cancelled when faced with disagreeable requotes.

Cons

  1. Orders are filled with a significant delay.

  2. There is no guarantee that orders will be executed in the market, at best market price.

  3. Usually, the spreads are a little bit higher in this type of model.

Regulated Brokers Offering the Market Execution Model

After weighing up the pros and cons, retail traders may decide that the market execution model is best for trading live assets. It is essential when choosing a broker to select a regulated broker with a good reputation.

AvaTrade offer advanced order types based on the market execution model. They acknowledge that slippage may occur, but assure best execution at all times, and provide a fully transparent order execution policy which is available to download from their website. Alternatively, City Index offer a one click trading model based on the same principle of market execution.

Importance of Choosing a Regulated Broker

Trading with a regulated broker is crucial in order to ensure that deposits are safe and protected. Most regulated brokers also now offer negative balance protection to clients and work hard to develop their trading environments to ensure their client’s satisfaction. Above all, regulated brokers are accountable to their financial regulatory bodies for any problems with their services.

Conclusion

Before selecting a broker, traders should ensure that they provide a transparent execution policy, and select one that most suits their trading style.

Related Pages

Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data.