Retail Execution is the process of executing trades in financial markets involving the interaction of retail traders with brokers. In this context, “retail traders” refer to individual investors, private individuals, or small investment funds trading financial instruments for their own investment purposes. Here are some key aspects of retail execution:
Brokers: Retail traders execute trades through brokers, which can be online platforms, banks, or other financial institutions.
Trading Platforms: Retail traders access the market through trading platforms provided by brokers. These platforms typically offer charts, analytics, news, and other tools to aid in making trading decisions.
Liquidity: Unlike institutional traders, retail traders usually do not have direct access to interbank liquidity. They trade at the prices provided by their brokers.
Order Execution: Retail orders can be executed in various ways, including market execution (at current market prices) and pending orders (limit orders, stop-limit orders).
Commissions and Spreads: Brokers may charge commissions for executing trades or operate based on spreads (the difference between the buying and selling prices). Retail traders often encounter higher spreads compared to institutional market participants.
Personal Accounts: Retail traders trade using their personal investment accounts, distinguishing them from institutional traders who may manage corporate or investment accounts.
Education and Support: Many brokers provide educational materials and support for retail traders to help them better understand the market and develop their trading strategies.
