Market Structure · Trading venues
Order types & execution quality
Stops, stop-limits, IOC, VWAP and slippage: how professionals get filled.
Step 1 of 4 · Overview15 min read ·
| Order | Does | Risk |
|---|---|---|
| Market | fill now at best available | slippage in thin markets |
| Limit | fill at your price or better | may not fill |
| Stop (stop-loss) | becomes a market order once price hits the stop | can fill far below stop in a gap |
| Stop-limit | becomes a limit order at the stop | may not fill at all in a fast drop |
| IOC | fill what you can immediately, cancel the rest | partial fills |
| VWAP algo | slices a big order across the day near average price | takes time |
Slippage = expected price − actual fill. Implementation shortfall measures total execution cost vs the price when you decided to trade.
Key idea
Recon tie-in: an IOC or algo order often produces many partial fills. If ops books the parent order but the counterparty confirms each child fill, you get qty and avg-price breaks.Next: Practice