Execution Failures

Execution failures occur when a trade order is submitted but fails to be processed or matched as intended by the exchange. This can happen due to technical glitches, system overloads, or invalid order parameters.

In volatile markets, the risk of execution failure increases as the exchange's infrastructure is tested to its limits. Such failures can lead to significant financial loss, especially if a trader is trying to close a position during a market move.

Robust risk management and the use of multiple trading venues are common strategies to mitigate this risk. They are a direct consequence of technical or systemic limitations.