In this article, We learn about “Transaction price “.Let’s Go!
“ transaction price ” in the transaction refers to the actual execution price of the transaction order.
This applies to buy and sell orders for a variety of financial instruments, including stocks, bonds, futures contracts and forex pairs.
When traders place an order to buy or sell a security, they can specify the price at which they want the trade to occur.
This is called “Limit ” for limit orders. However, the price at which the order is actually filled may vary, and this is the price at which the order is filled.
For a market order (ie an instruction to trade a security at the best available price), the execution price is whatever price is available at the time the order is executed.
Due to rapidly changing market conditions, market orders may be executed at a different price than when the order was placed.
With a limit order, on the other hand, traders specify the highest price they are willing to pay when buying a security, or the lowest price they are willing to accept when selling it.
Limit orders will be filled at the limit price or better. If the market has not reached the limit price, the order may not be filled at all.
Understanding the concept of transaction price is important because it can affect a trader’s trading profit or loss.
The difference between the expected price of a trade and the price at which it is filled is known as Slippage, and it is a factor that traders need to consider, especially when trading in fast-moving or thinly traded markets .
If you want to learn more foreign exchange trading knowledge, please click: Trading Education.
