In simple terms
In trading, execution describes how an order becomes one or more completed executions, called fills. Good execution is not just a favorable price: it also considers completed quantity, speed, fill probability, costs, and compliance with the instructions.
How the term is used
Calling an execution “poor” is meaningful only after stating the objective and benchmark, meaning the reference used for comparison. An urgent order may favor speed and completion; a passive order may seek a better price while accepting delay or no fill. Reproducible comparisons require timestamps, quantities, individual fill prices, and the market conditions observable when the order was submitted.
For the full treatment of metrics, benchmarks, and required data, see Execution quality.
Limit
A fill alone does not prove good execution, and the best price does not automatically offset delay, unfilled quantity, or higher costs. Best-execution rules also depend on jurisdiction, intermediary, instrument, and client type.
Sources
- U.S. Securities and Exchange Commission, Frequently Asked Questions: Rule 605 of Regulation NMS (April 1, 2026) — timestamps, benchmarks, price improvement, and fill rates for covered U.S. orders; this is staff guidance with no independent legal force.
- European Securities and Markets Authority, MiFID II, Article 27 — Obligation to execute orders on terms most favourable to the client — best-execution factors for EU investment firms; it describes a process obligation, not a guarantee of the best price on every order.