Execution Strategy

Execution strategy is a trading strategy, which aims to reduce the market impact cost and in turn improve the performance of the strategy. They are mainly used to streamline the trading process. Execution strategies are mainly classified into the following categories:

Schedule-driven Strategies - These strategies split a large order into smaller orders to minimize the market impact cost. TWAP and VWAP based algorithmic strategies are schedule driven, and they precisely follow predefined execution schedules based on time and volume traded traded respectively.

Opportunistic Strategies - Opportunistic strategies do not have predefined execution schedule. They utilize real-time information to search for an optimal time to trade and create an execution schedule dynamically.

Evaluative Strategies - Evaluative strategies utilize approaches of both opportunistic and schedule- driven algorithms while executing orders.