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Trade Lifecycle
Order and Execution
Learning Outcome
5
Explain the importance of trade confirmation.
4
Understand order matching and execution.
3
Explain broker and exchange processing.
2
Identify key order details.
1
Define an order and its role.
What is an Order?
Order: An instruction given by a client to buy or sell a security, specifying details such as quantity, price, and validity.
Placed by the client: The client decides what to trade and gives this instruction to the broker.
Sent to the exchange: The broker forwards the order to the stock exchange (such as NSE or BSE) through the trading system.
What is Execution?
Execution: The actual completion of a trade, which happens only when a matching buyer and seller are found in the market.
Order matching:
The exchange's trading system continuously matches buy orders and sell orders based on price and time priority.
Trade confirmation: Once matched, the trade is confirmed and details are sent back to the client through the broker.
Summary
5
Trade confirmation follows execution.
4
Execution occurs when orders match.
3
Brokers send orders to the exchange.
2
Orders specify quantity, price, and validity.
1
An order is an instruction to buy or sell.
Quiz
Who sends the client's order to the stock exchange?
A. Clearing Corporation
B. Custodian
C. Broker
D. Depository
Quiz-Answer
Who sends the client's order to the stock exchange?
A. Clearing Corporation
B. Custodian
C. Broker
D. Depository
Trade Lifecycle & Reconciliation Operations - Order and Execution
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