Trading & Market Structure

Implementation Shortfall

Definition

What is Implementation Shortfall?

The difference between a portfolio decision's theoretical value and the actual result after delays, fees, and market impact.

Example in practice

A share rises before the manager finishes buying, increasing implementation shortfall.

Keep learning

The highest price a buyer is currently willing to pay for a security.

The lowest price a seller is currently willing to accept for a security.

The difference between the best available buying and selling prices.

An instruction to buy or sell immediately at the best available prices.

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