Direct answer
Execution Problems are situations where the trade you intend (based on a quote or expected price) does not match what actually happens when your order is executed. To investigate, you should check the cost items that are either (1) published in a provider’s fee schedule or (2) can change during the time between quote and fill. The main categories to review are spread-related costs (the bid–ask difference) and any explicit fees such as commissions or dealing charges.
Mechanism and definition
Start by separating two kinds of inputs.
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Stable, published pricing and charges: These are the parts you can verify from the provider’s documentation, such as whether there is a commission, and how it is calculated (for example, per trade or per volume). Also check how the provider describes the spread type—whether it is presented as fixed or can move.
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Variable execution outcomes: Even if you know the scheduled costs, the realized result can differ because the market may move and because liquidity may be insufficient at the moment your order reaches execution. In practice, the spread you see on your screen is not guaranteed to be the spread at the exact execution instant.
A common mistake is to compare “expected cost” using a single displayed spread to what you later observe in fills. The gap is often caused by timing, market volatility, order-book depth, and execution rules, not by the fee schedule itself.
Evidence or example (with assumptions)
Assume you place an order based on a displayed bid–ask quote.
- Let the displayed ask be 1.2000 and the displayed spread be 0.0002 (so bid would be 1.1998). If the provider charges a commission, assume it is a fixed amount per lot or per trade. These components are the “known” parts.
- During the delay between placing the order and execution, the market can widen the spread. If the execution happens when the spread widens to 0.0006 and the ask moves to 1.2002, the all-in cost for the trade is higher than what you would estimate using the original display.
This example uses hypothetical numbers to show the structure: spread changes are a variable execution effect, while commissions (if published and unchanged by execution timing) are stable costs. Execution Problems become more likely when variable factors dominate, such as during fast price moves or thin liquidity.
Material failure modes to look for include:
- Widening spreads between quote and fill.
- Partial fills, where different portions execute at different prices.
- Order handling differences (for example, whether the platform can execute instantly at a changed price versus using a different matching approach).
Limitations and risks
You cannot fully predict Execution Problems from fee and spread information alone. Costs and outcomes depend on variable conditions like market liquidity and volatility at the execution moment. Also, the same fee schedule can produce different realized outcomes across order sizes, timing, and market regimes.
When verifying, treat historical relationships as informative but not predictive: a pattern in past fills does not guarantee the same spread behavior in the future.
Finally, documentation can be written in general terms. If the wording leaves ambiguity about how commissions, spreads, and execution timing interact, you should note that uncertainty rather than assuming a fixed relationship.
Verification or next question
To independently verify what matters, you can review:
- The provider’s published fee schedule for commission/dealing charges and how they are calculated.
- How the provider describes spread behavior (fixed vs variable) and any descriptions of execution mechanics.
- Your own execution records: compare the displayed quote at order placement with the actual fill prices and the timestamps. If spreads widened or fill prices differed materially, that points to variable execution conditions.
A useful next question is: Which specific line items (spread-related and commission-related) changed between the time you placed the order and the time the fill occurred?