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Instant execution

An order model where you request a specific displayed price and the broker either fills it exactly or sends a requote.

Instant execution gives price certainty at the cost of fill certainty. In quiet conditions it fills normally; in fast markets it produces a chain of requotes and you may not get in or out at all.

Some platforms let you attach a deviation allowance, which blurs the line between the two models by permitting a small amount of slippage before requoting. Check which model an account uses before trading news, since it changes the risk profile of every stop.

Example: during a rate decision a trader tries six times to close a losing position under instant execution, is requoted each time, and finally exits 34 pips worse than the first attempt.

Related: market-execution, requote, slippage-tolerance, spread-widening

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

Slippage on a market orderA buy order clears four price levels, so the average price paid is worse than the price first quoted.Buy 1,000 shares at marketpricesell orders resting (bar length = size)20.04300 shares20.03200 shares20.01200 shares20.00300 sharesnothing resting at 20.02order sweeps up the bookaverage fill 20.02SLIPPAGE0.02 a share$20.00 in totalintended 20.00Each level fills at its own price; the average is what you really paid.
Slippage on a market order. You click at 20.00, but only 300 shares are resting there, so the rest of the order fills at 20.01, 20.03 and 20.04. The average price paid is 20.02, and that two-cent gap is slippage.

Educational only, not advice. Spotted an error? Post in Site Feedback.