Execution Speed (Latency)
Definition
Execution speed, often referred to as latency, is the time it takes for an order to travel from the trading platform to the market and be filled. Faster execution reduces the risk of price changes between order placement and fill. Slow execution increases slippage and rejected orders, making execution speed a key but often hidden broker comparison factor.
In Plain English
In plain terms, execution speed is how quickly your trade is carried out after you click buy or sell. Latency is the delay in that process. Even small delays can matter in fast-moving markets, as prices may change before your order is completed.
How It Works
- You submit an order through the broker’s platform.
- The order is transmitted to the broker’s servers.
- The broker routes the order internally or to external liquidity providers.
- The market responds with an available price.
- The order is filled and confirmation is sent back to the platform.
- Latency can occur at any stage of this process.
- Network quality, server location, and technology affect speed.
- Execution speed varies by instrument, market conditions, and time of day.
Why This Matters for Traders
Execution speed directly affects realised prices. In fast or volatile markets, even milliseconds can result in different fill prices. For traders using tight stops, short-term strategies, or market orders, slower execution can materially worsen outcomes. While long-term traders are less sensitive, execution delays can still matter during market opens, closes, and news events.
Common Misunderstandings
- Execution speed only matters for high-frequency traders: all traders are affected during volatility.
- Fast internet alone guarantees fast execution: broker infrastructure is the main factor.
- Quoted prices reflect guaranteed execution prices: delays can change fills.
- Regulation ensures fast execution: regulation sets standards, not speed.
- Demo execution speed reflects live trading: demo environments are often idealised.
How This Affects Broker Choice
Execution speed is a meaningful but underreported broker differentiator. When comparing brokers, users should consider:
• Average execution times disclosed by the broker.
• Slippage frequency during volatile periods.
• Server location relative to major liquidity centres.
• Platform stability during high-traffic events.
• Transparency around execution statistics.
From a monetisation and comparison perspective, execution speed explains why two brokers with similar spreads can produce very different real-world results, supporting broker reviews focused on execution reliability.
Risks & Common Mistakes
• Trading volatile markets without accounting for execution delays.
• Using market orders during news with slow-executing brokers.
• Assuming mobile execution speed matches desktop performance.
• Ignoring rejected or requoted orders as execution signals.
• Choosing brokers with limited disclosure on execution quality.
Risk note: slow execution can increase slippage and losses, particularly when leverage is used and markets move quickly.
Real-World Example
You place a market order when the quoted price is 1.2000.
• With fast execution, the order fills at 1.2001.
• With slower execution, the order fills at 1.2006.
The difference reflects latency and price movement during execution, not an error. On a leveraged position, this difference can materially affect risk and outcome.
What to Check Before Trading
- Does the broker publish average execution speed data?
- How often does slippage occur during volatile markets?
- Where are the broker’s servers located?
- Is execution quality consistent across platforms?
- Are there frequent requotes or rejected orders?
- Can execution behaviour be tested on a small live account?
- Is execution transparency supported by regulation?
Related Concepts
Execution speed is a core component of overall execution quality.
Slippage often increases when execution is slow.
Market orders are most sensitive to execution delays.
Low liquidity magnifies the impact of latency.
High volatility increases the cost of slow execution.
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