Execution Gain, in crypto trading, represents the positive difference between the theoretical price at which a trade was intended to be executed and the actual, more favorable price achieved during its completion. This metric quantifies the value added by superior execution strategies.
Mechanism
This gain arises from efficient order routing, minimal market impact, timely access to deep liquidity across various venues, and adept management of market microstructure. Advanced algorithms, particularly in RFQ and smart trading systems, leverage real-time data to find optimal pricing opportunities or reduce slippage.
Methodology
The strategic approach focuses on continuous optimization of trading algorithms and infrastructure to identify and capture transient pricing advantages. It involves benchmarking actual execution prices against theoretical benchmarks (e.g., arrival price, VWAP) and systematically refining order placement tactics to consistently outperform expectations, thereby enhancing portfolio returns.
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