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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.2% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Tuesday Aug 22 2023 11:36
3 min
In simple terms, a trade ‘execution’ is when your buy or sell instruction is completed, rather than when you actually place the trade order.
When you place a trade with a broker, there is a small gap between when you place the trade, and when it’s actually fulfilled.
Brokers are required by law to find the best way to place your trade, and this can take varying amounts of time. This means that the gap between placing the trade and executing it can vary in length.
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Asset prices can change between you placing a trade and then your broker executing it. This is known as ‘slippage’.
This may mean that although you place your trade when your chosen asset is priced at $45, by the time it’s executed, the price could have moved to $46. Any profit or loss you make will usually be on the executed price.
This can also be the case when you sell. So, if you place an order to close your trade with a profit of $198, say, you may find that by the time the close order is executed, your profit has fallen to $195. (Or risen to $200.)
If you place a particularly large order for less-liquid asset, you may find that your broker (or your trading platform) breaks the order down into smaller trades so it can be fulfilled.
So, let’s say you want to place a $10,000 trade on a less liquid asset, and the buyers just aren’t there. Your broker may need break the trade down into four $2,500 trades, and then buy those four positions as and when the opportunities arise.
If this happens, it’s likely your trades will be made at different entry and exist points, and any profits or losses will also vary position to position.
Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.
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Wednesday, 13 August 2025
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