Execution Aggressiveness

Execution aggressiveness refers to the degree to which a trading algorithm prioritizes speed of execution over the cost of the trade. An aggressive algorithm will lift the offer or hit the bid immediately to ensure a quick fill, even if it results in higher slippage.

A passive algorithm, conversely, will place limit orders and wait for the market to come to it, potentially saving on costs but risking that the order is never fully filled. Finding the right level of aggressiveness is a critical strategic decision that depends on market volatility, order size, and the urgency of the trading mandate.

It directly influences the balance between fill probability and price efficiency.