Definition
Execution speed is a trading concept that measures how quickly an order is completed once it has been sent to an exchange or matching engine. It focuses on the elapsed time between order submission and confirmation that the order has been filled, partially filled, or rejected. In crypto markets, where prices can move rapidly, execution speed is a key factor in determining how closely the final trade price matches the expected price at the moment the order was placed.
Execution speed is influenced by technical and market factors, including network performance, matching engine efficiency, and overall market activity. Slow execution speed can contribute to less favorable trade outcomes, often observed as increased slippage between the intended and actual execution price. It is closely related to latency, which describes the underlying delays in data transmission and processing that ultimately affect how fast trades are executed.
Context and Usage
In trading discussions, execution speed is often referenced when evaluating the quality of a trading venue, broker, or algorithmic setup. Market participants may compare execution speed across platforms to understand which environments are better suited for strategies that are sensitive to rapid price changes. Higher execution speed generally supports tighter alignment between quoted prices and realized trade prices, reducing the likelihood of unexpected slippage.
Execution speed is particularly important in high-volatility conditions, where even small delays can lead to materially different execution prices. It is conceptually linked to latency, since lower latency in order routing and market data typically enables faster execution. When traders analyze performance, they may separate the impact of execution speed from other factors, such as order type or market depth, to better understand how timing alone affected trade results.