How to read an order execution policy without falling asleep

[Amanhasnoname]

Execution policies are written to be skimmed, and that is exactly why the useful lines get missed. A twenty-minute read with a highlighter pays for itself.

Look for these in particular:

- Whether slippage is described as symmetric. Phrases like "price improvement may be passed on" are different from a promise that positive slippage is honoured
- Any mention of last look or a short hold on orders before acceptance
- The maximum deviation or slippage tolerance, and whether it can be set per order
- Treatment of stops and pending orders during gaps, and what price a stop fills at
- Order routing language: a dealing desk, a single liquidity provider, or a pool of several
- Who decides what counts as "normal market conditions"

Pay close attention to the words "may", "reserves the right" and "at its discretion". Those mark where behaviour is up to the broker rather than guaranteed.

Reading is only half of it. Turn each claim into a test: if the policy says slippage is symmetric, check a few hundred fills and count how often it is positive versus negative. Documents describe intentions, and fills describe practice.

Which line in an execution policy ended up misleading you compared with the fills you actually got?