Definition
Order execution is the concept that describes how a buy or sell instruction in a market is actually carried out once it has been submitted. It covers the matching of an order against available liquidity, the final trade price, and the quantity that is filled. In crypto trading, order execution occurs on venues such as a CEX, where an order interacts with an order book or internal matching engine. The quality of order execution is often evaluated by how closely the final trade outcome aligns with the expected price and size at the time the order was placed.
Context and Usage
Order execution is closely tied to the type of order used, such as a Market Order that prioritizes speed of fill or a Limit Order that specifies a maximum or minimum acceptable price. On a CEX, execution depends on current market depth, latency, and the matching rules that determine which orders trade first. Differences between the intended order price and the final execution price are commonly referred to as slippage, and they reflect how market conditions affected the execution process. As a concept, order execution focuses on the outcome of translating an order instruction into an actual trade under real-time market conditions.