Abstract
In choosing among alternative execution strategies, a buy-side trader should consider five factors: 1) commissions, 2) liquidity impact, 3) expected base-price moves, 4) information leakage, and 5) execution risk. Choosing the best execution strategy for a given order involves balancing the costs and benefits associated with these factors. The authors illustrate using “applications” of how the five factors relate to some common execution strategies and discuss when a trader should use or avoid a given strategy.
- © 2003 Pageant Media Ltd
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