What is market execution and why prices can change?

Short answer

Market execution means that your order is executed at the best available market price at the moment it reaches the market. Because prices change constantly, the final execution price may differ from the price you clicked.

What is market execution?

With market execution, you do not request a fixed price. Instead, you request that your trade be executed at the current market price.

This means:

1. the order is filled at the best available price,
2. execution depends on real-time liquidity,
3. price is confirmed after execution, not before.

Market execution reflects how real financial markets operate.

What happens after you click Buy or Sell

When you place a trade:

1. your order is sent from the trading platform,
2. it passes broker validation,
3. it reaches liquidity providers,
4. it is executed at the best available price at that moment.

Even if this process takes milliseconds, prices may change during that time.

Why the execution price can change

Prices can differ from what you clicked because:

1. the market moves continuously,
2. available liquidity at a specific price may change,
3. Bid and Ask prices update every moment.

This is normal behavior, not an error.

What is slippage?

Slippage occurs when the execution price differs from the expected price.

Slippage can be:

1. positive — executed at a better price,
2. negative — executed at a worse price.

Slippage is more likely during:

1. high volatility,
2. low liquidity,
3. fast market movements.

What are gaps and why they happen

A gap occurs when the market price jumps from one level to another without trading in between.

This often happens:

1. at market open,
2. after weekends,
3. during major news events.

If there is no liquidity at intermediate prices, orders are executed at the next available price.

The illustration shows that market execution is based on available prices at execution time, not on the price visible when the order was placed.

Why this matters for traders

Understanding market execution helps traders:

1. avoid confusion about “wrong” prices,
2. understand slippage and gaps,
3. set realistic expectations for execution,
4. trade more confidently in volatile conditions.

Most complaints about price differences are explained by market execution mechanics.

What’s next

Now that market execution is clear, the next important topic is:

1. Balance, equity, margin, and free margin explained.

These concepts help traders understand margin calls and risk management.