4

Step 4Execution

If you think of a body or an organism as a metaphor for the trading process, then execution is the heart pumping trades and market data throughout the Street and the component functions within the trading process. However, because of fragmentation, which was described in Book 2, Part 1, execution as we mean it in Step 4 does not occur in a single entity or even location in most markets.

Instead, competing trading venues, often in different cities or even countries, trade the same instruments simultaneously, and trade reports and quotes frequently come either from a reporting exchange, mutualized reporting organization, or third- party vendor. When we describe Step 4, we are therefore talking about all these competing and cooperating ...

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