How Markets Actually Work

Trading outside the exchange's main session where the market permits it.

Example: A share reacts to earnings released after the regular close.

After-Hours Trading describes trading outside the exchange's main session where the market permits it; distinguish issuance from secondary trading and displayed quotes from completed transactions.

A share reacts to earnings released after the regular close.

A practical review of After-Hours Trading compares transparency, liquidityThe ease and speed with which an investment can be converted into cash without a major price concession., counterparty exposure and all-in cost with available alternatives. Also compare Closing Auction, defined here as an end-of-session process that matches orders at a single closing price.

The lowest price a seller is currently willing to accept for a securityA tradable financial claim or ownership interest, such as a share, bond, or fund unit..

Example: The best ask for the share is ₦25.10.

Ask is the lowest price a seller is currently willing to accept for a security; distinguish the quoted market from executable liquidity. A displayed price may cover only a small quantity.

The best ask for the share is ₦25.10.

For Ask, inspect the bid, offer, depth, recent volume, order conditions, fees and settlement cycle; use a limit where price control matters. Historical volume does not guaranteeA contractual promise by another party to meet an obligation if the primary debtor does not. liquidity for a specific trade size; Also compare Bid-Ask Spread, defined here as the difference between the best available buying and selling prices.

A market where buyers and sellers submit competing orders and trades occur at matched prices.

Example: The opening auction determines one price that clears the most orders.

Auction Market is a market where buyers and sellers submit competing orders and trades occur at matched prices; the market structure shapes price formation, transparency, access and liquidity by determining whether transactions occur through an exchange, dealer, auction or negotiated process.

The opening auction determines one price that clears the most orders.

For Auction Market, identify the venue or process, eligible participants, price-setting method, disclosureThe provision of material information needed for informed decisions., trading hours, fees, clearing and settlement arrangements; formal rules reduce uncertainty but cannot eliminate failed trades or misconduct.

The quantity-weighted average price of all fills in an order.

Example: Three fills produce an average execution price of ₦20.08.

Average Execution Price is the quantity-weighted average price of all fills in an order; the result of the trading process depends on the order book, spread, depth, volatilityThe degree and frequency of price or return fluctuations., venue rules and priority among competing instructions.

Three fills produce an average execution price of ₦20.08.

Before using Average Execution Price, understand the venue's matching rules, trigger conditions, trading hours and treatment during halts or fast markets; historical volume does not guarantee liquidity for a specific trade size. Also compare Partial Fill, defined here as execution of only part of an order.

The duty or process of seeking the most favourable reasonably available trading outcome for a client.

Example: The broker considers price, cost, speed, and likelihood of execution.

Best Execution is the duty or process of seeking the most favourable reasonably available trading outcome for a client; distinguish the quoted market from executable liquidity. A displayed price may cover only a small quantity.

The broker considers price, cost, speed, and likelihood of execution.

The practical test for Best Execution is whether the order instruction produces the intended exposure at an acceptable all-in execution cost; fast execution usually requires accepting less control over price.

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

Example: The best bid for a share is ₦24.90.

Bid is the highest price a buyer is currently willing to pay for a security; distinguish the quoted market from executable liquidity. A displayed price may cover only a small quantity.

For example, the best bid for a share is ₦24.90.

For Bid, inspect the bid, offer, depth, recent volume, order conditions, fees and settlement cycle; use a limit where price control matters. Liquidity visible in normal markets can disappear during stress; Also compare Bid-Ask Spread, defined here as the difference between the best available buying and selling prices.

The difference between the best available buying and selling prices.

Example: A ₦24.90 bid and ₦25.10 ask create a ₦0.20 spread.

Bid-Ask Spread is the difference between the best available buying and selling prices; the result of the trading process depends on the order book, spread, depth, volatility, venue rules and priority among competing instructions.

A ₦24.90 bid and ₦25.10 ask create a ₦0.20 spread.

Before using Bid-Ask Spread, understand the venue's matching rules, trigger conditions, trading hours and treatment during halts or fast markets. Also compare Ask, defined here as the lowest price a seller is currently willing to accept for a security.

A transaction involving a large quantity of securities, often negotiated away from the public order book.

Example: An institution sells a 5% stake through a block trade.

Block Trade is a transaction involving a large quantity of securities, often negotiated away from the public order book; distinguish the quoted market from executable liquidity. A displayed price may cover only a small quantity.

For example, an institution sells a 5% stake through a block trade.

The practical test for Block Trade is whether the order instruction produces the intended exposure at an acceptable all-in execution cost; historical volume does not guarantee liquidity for a specific trade size.

The exchange's standard trading unit for a security.

Example: Orders below the 100-share board lot enter the odd-lot market.

Board Lot is the exchange's standard trading unit for a security; the result of the trading process depends on the order book, spread, depth, volatility, venue rules and priority among competing instructions.

Orders below the 100-share board lot enter the odd-lot market.

For Board Lot, inspect the bid, offer, depth, recent volume, order conditions, fees and settlement cycle; use a limit where price control matters. Also compare Odd Lot, defined here as a trade quantity smaller than the standard board lot.

The fee paid to borrow a security, often for short sellingSelling a borrowed security with the intention of buying it back later..

Example: A scarce share carries a high annualised borrow fee.

Borrow Fee is the fee paid to borrow a security, often for short selling; the trading process affects how an order reaches the market, interacts with available liquidity and becomes an executed trade or displayed price.

A scarce share carries a high annualised borrow fee.

The practical test for Borrow Fee is whether the order instruction produces the intended exposure at an acceptable all-in execution cost; historical volume does not guarantee liquidity for a specific trade size.

A day on which relevant financial institutions and markets are open for normal processing.

Example: A redemptionThe process of selling fund units back to the fund in exchange for cash. submitted late on Friday may begin processing on the next applicable business day.

A business day is a day when the institutions needed to process a transaction are open. It usually excludes weekends and public holidays, but the relevant calendar depends on the bank, market, country and contract involved. A day can be a business day in one place and a holiday in another.

If a fund says withdrawals take three business days and accepts an instruction on Friday evening after its cut-off, counting may not start until Monday. A public holiday on Tuesday could move completion to Thursday or later. “Three days” and “three business days” therefore produce different expectations.

Check the product's definition, submission cut-off and local holiday calendar before promising when cash will arrive. Cross-border transactions may need both countries' payment systems to be open. A business day describes processing availability; it does not guarantee that every correctly submitted transaction will finish that day.

An entity that becomes the buyer to every seller and seller to every buyer for cleared trades.

Example: The clearing house reduces direct counterparty exposure between traders.

Central Counterparty is an entity that becomes the buyer to every seller and seller to every buyer for cleared trades; the clearing process reduces operational complexity by determining what each participant must deliver or receive and when.

The clearing house reduces direct counterparty exposure between traders.

For Central Counterparty, confirm the clearing entity, settlement cycle, collateralAn asset pledged to secure repayment of an obligation., netting method, default waterfall, asset segregation and treatment of failed delivery; collateral protection depends on valuation, segregation and timely transfer.

An institution that records securities ownership and supports clearing and settlement.

Example: After an exchange-traded share purchase, the securities settle into the investorA person or organisation that commits capital with the expectation of a financial return.'s securities account through the market process.

A central securities depository, or CSD, is market infrastructure that records securities in electronic form and helps transfer ownership after trades. It maintains accounts for participants and supports settlement, corporate actions and ownership records. It does not choose investments or guarantee their market valueThe price at which an asset could trade in the market at a given time..

After an exchange matches a share purchase, the buyer's cash and the seller's securities must still be exchanged. The settlement system works with the CSD to debit and credit the relevant securities accounts, often using delivery versus payment so that the asset and money move together.

Investors usually access the CSD through a broker or custodianA licensed institution that safeguards a fund's cash and securities separately from the manager's own assets. rather than dealing with it directly. Confirm how the beneficial ownerThe natural person who ultimately owns, controls, or benefits from an account or investment.'s interest is recorded, how statements can be checked and what happens if an intermediary fails. A reliable depository reduces paper and settlement riskThe risk that one side of a transaction delivers while the other does not., but operational outages can still delay access.

A rule that pauses or limits trading after unusually large price moves.

Example: A broad market decline triggers a 15-minute circuit breaker.

Circuit Breaker is a rule that pauses or limits trading after unusually large price moves; the trading process affects how an order reaches the market, interacts with available liquidity and becomes an executed trade or displayed price.

A broad market decline triggers a 15-minute circuit breaker.

Before using Circuit Breaker, understand the venue's matching rules, trigger conditions, trading hours and treatment during halts or fast markets; an order can be valid and still remain unfilled. Also compare Price Limit, defined here as the maximum permitted price movement during a trading period.

An institution that clears trades, calculates obligations, and manages settlement and default riskThe risk that an issuer does not pay interest or principal when due..

Example: The clearing house collects margin from futures traders.

Clearing House is an institution that clears trades, calculates obligations, and manages settlement and default risk; the clearing process reduces operational complexity by determining what each participant must deliver or receive and when.

The clearing house collects margin from futures traders.

Before relying on it, understand margin requirements, default procedures, operational resilience and whether settlement is gross or net; netting lowers exposures only when obligations are legally enforceable.

An end-of-session process that matches orders at a single closing price.

Example: Index funds trade heavily in the closing auction to match benchmarkA reference index or rate used to evaluate a fund's performance. weights.

Closing Auction is an end-of-session process that matches orders at a single closing price; the market structure shapes price formation, transparency, access and liquidity by determining whether transactions occur through an exchange, dealer, auction or negotiated process.

Index funds trade heavily in the closing auction to match benchmark weights.

For Closing Auction, identify the venue or process, eligible participants, price-setting method, disclosure, trading hours, fees, clearing and settlement arrangements; the market structure can provide access without guaranteeing liquidity.

A trading system that matches orders throughout the session as compatible prices arrive.

Example: Shares trade continuously between the opening and closing auctions.

Continuous Trading is a trading system that matches orders throughout the session as compatible prices arrive; distinguish issuance from secondary trading and displayed quotes from completed transactions.

Shares trade continuously between the opening and closing auctions.

Before using Continuous Trading, understand how orders or subscriptions are accepted, how allocations occur and what recourse exists after an error or failed settlement; different venues and issuance methods can expose the same security to different costs.

A transaction in which one intermediary matches a buyer and seller internally, subject to applicable rules.

Example: The broker crosses two client orders at a fair market price.

Cross Trade is a transaction in which one intermediary matches a buyer and seller internally, subject to applicable rules; the trading process affects how an order reaches the market, interacts with available liquidity and becomes an executed trade or displayed price.

The broker crosses two client orders at a fair market price.

Evaluate Cross Trade from execution records: decision price, submitted order, fills, average price, fees, slippage and any unexecuted balance; an order can be valid and still remain unfilled.

A private trading venue that does not display its full order book publicly before execution.

Example: An institution uses a dark pool to reduce information leakage from a large order.

Dark Pool is a private trading venue that does not display its full order book publicly before execution; the market structure shapes price formation, transparency, access and liquidity by determining whether transactions occur through an exchange, dealer, auction or negotiated process.

An institution uses a dark pool to reduce information leakage from a large order.

Before using Dark Pool, understand how orders or subscriptions are accepted, how allocations occur and what recourse exists after an error or failed settlement; different venues and issuance methods can expose the same security to different costs.

A market where dealers quote prices and trade from their inventories.

Example: An investor requests a corporate-bond quote from several dealers.

Dealer Market is a market where dealers quote prices and trade from their inventories; the market structure shapes price formation, transparency, access and liquidity by determining whether transactions occur through an exchange, dealer, auction or negotiated process.

An investor requests a corporate-bond quote from several dealers.

For Dealer Market, identify the venue or process, eligible participants, price-setting method, disclosure, trading hours, fees, clearing and settlement arrangements. Also compare Continuous Trading, defined here as a trading system that matches orders throughout the session as compatible prices arrive.

A scheduled day on which a fund accepts and prices valid subscriptions or redemptions.

Example: A weekly dealing fund prices instructions only on Wednesday if received before the stated cut-off.

A dealing day is a scheduled day when a fund accepts valid purchase or redemption instructions for pricing. Some funds deal every business day, while others deal weekly, monthly or less often. The instruction must usually arrive before a stated cut-off to receive that day's valuation.

A propertyLand and buildings held for use, rent, development, or capital appreciation. fund deals each Wednesday at the net asset valueThe value of a fund's assets minus its liabilities, usually expressed in total and per unit. calculated for that point. An investor submitting a redemption on Wednesday afternoon after the noon cut-off may be placed into the following week's dealing cycle, even though the office was open when the request arrived.

Read dealing frequency together with cut-off time, valuation pointThe specified time at which a fund values its assets and calculates dealing prices. and payment timetable. A dealing day determines when an order enters the pricing process, not necessarily when cash leaves or reaches the investor. Funds may also suspend dealing or use gates under conditions described in their documents.

A regulated venue where standardised securities or contracts trade under published rules.

Example: Listed shares trade through the exchange's electronic system.

Exchange-Traded Market is a regulated venue where standardised securities or contracts trade under published rules; the function of the market structure is structural: it determines who supplies the security, who receives the cash and how a transaction becomes binding.

Listed shares trade through the exchange's electronic system.

For Exchange-Traded Market, identify the venue or process, eligible participants, price-setting method, disclosure, trading hours, fees, clearing and settlement arrangements; the quoted or offer priceThe price at which a fund or market participant sells units or securities to an investor. may not equal the price available for a large transaction.

The completed portion of an order.

Example: A 10,000-share order receives a full fill at ₦12.50.

Fill is the completed portion of an order; the trading process belongs to market microstructure: it explains the path between an investor's decision and the price actually obtained.

For example, a 10,000-share order receives a full fill at ₦12.50.

For Fill, inspect the bid, offer, depth, recent volume, order conditions, fees and settlement cycle; use a limit where price control matters. Fast execution usually requires accepting less control over price; Also compare Partial Fill, defined here as execution of only part of an order.

The difference between a portfolioThe complete collection of investments owned by an investor or managed under one mandate. decision's theoretical value and the actual result after delays, fees, and market impact.

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

Implementation Shortfall is the difference between a portfolio decision's theoretical value and the actual result after delays, fees, and market impact; distinguish the quoted market from executable liquidity. A displayed price may cover only a small quantity.

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

Evaluate Implementation Shortfall from execution records: decision price, submitted order, fills, average price, fees, slippage and any unexecuted balance. Also compare Best Execution, defined here as the duty or process of seeking the most favourable reasonably available trading outcome for a client.

A participant that supplies executable buy and sell interest to a market.

Example: The liquidity provider narrows the ETF's spread by quoting both sides.

Liquidity Provider is a participant that supplies executable buy and sell interest to a market; liquidity has three dimensions: how quickly an asset can be sold, how much can be sold, and how large a price concessionA contractual right to build, operate, or collect revenue from an asset or service for a stated period. the sale requires.

The liquidity provider narrows the ETF's spread by quoting both sides.

Evaluate Liquidity Provider from execution records: decision price, submitted order, fills, average price, fees, slippage and any unexecuted balance; an order can be valid and still remain unfilled.

The standard quantity in which a security or contract trades.

Example: One futures contractA standardised exchange-traded agreement to buy or sell an underlying asset at a future date. represents a fixed lot of the underlying commodityA standardised physical good such as gold, crude oil, wheat, or cocoa..

Lot Size is the standard quantity in which a security or contract trades; distinguish the quoted market from executable liquidity. A displayed price may cover only a small quantity.

One futures contract represents a fixed lot of the underlying commodity.

The practical test for Lot Size is whether the order instruction produces the intended exposure at an acceptable all-in execution cost; an order can be valid and still remain unfilled. Also compare Board Lot, defined here as the exchange's standard trading unit for a security.

The quantity of buy and sell orders available at different prices.

Example: A deep market can absorb a large order with limited price movement.

Market Depth is the quantity of buy and sell orders available at different prices; the trading process belongs to market microstructure: it explains the path between an investor's decision and the price actually obtained.

For example, a deep market can absorb a large order with limited price movement.

Before using Market Depth, understand the venue's matching rules, trigger conditions, trading hours and treatment during halts or fast markets; liquidity visible in normal markets can disappear during stress.

The price movement caused by placing or executing an order.

Example: Selling a large position pushes the share priceThe market price at which one share is quoted or traded. lower.

Market Impact is the price movement caused by placing or executing an order; distinguish the quoted market from executable liquidity. A displayed price may cover only a small quantity.

Selling a large position pushes the share price lower.

For Market Impact, inspect the bid, offer, depth, recent volume, order conditions, fees and settlement cycle; use a limit where price control matters. Also compare Implementation Shortfall, defined here as the difference between a portfolio decision's theoretical value and the actual result after delays, fees, and market impact.

Offsetting obligations so only a net amount is settled.

Example: Two opposite swap payments are combined into one net payment.

Netting describes offsetting obligations so only a net amount is settled; legal finality, collateral, default procedures and the identity of the counterparty determine how risk is redistributed.

Two opposite swap payments are combined into one net payment.

Before relying on it, understand margin requirements, default procedures, operational resilience and whether settlement is gross or net; netting lowers exposures only when obligations are legally enforceable. Also compare Novation, defined here as the replacement of an original contract party with another, often a central counterparty.

The replacement of an original contract party with another, often a central counterparty.

Example: After clearing, the CCP becomes counterparty to both sides.

Novation is the replacement of an original contract party with another, often a central counterparty; legal finality, collateral, default procedures and the identity of the counterparty determine how risk is redistributed.

After clearing, the CCP becomes counterparty to both sides.

For Novation, confirm the clearing entity, settlement cycle, collateral, netting method, default waterfall, asset segregation and treatment of failed delivery. Also compare Netting, defined here as offsetting obligations so only a net amount is settled.

A trade quantity smaller than the standard board lot.

Example: An investor sells 37 shares as an odd lot.

Odd Lot is a trade quantity smaller than the standard board lot; the result of the trading process depends on the order book, spread, depth, volatility, venue rules and priority among competing instructions.

For example, an investor sells 37 shares as an odd lot.

Before using Odd Lot, understand the venue's matching rules, trigger conditions, trading hours and treatment during halts or fast markets; fast execution usually requires accepting less control over price. Also compare Round Lot, defined here as a trade quantity equal to a standard lot or a multiple of it.

A pre-session process that matches orders at a single opening price.

Example: Overnight orders are combined to establish the day's opening price.

Opening Auction is a pre-session process that matches orders at a single opening price; the market structure shapes price formation, transparency, access and liquidity by determining whether transactions occur through an exchange, dealer, auction or negotiated process.

Overnight orders are combined to establish the day's opening price.

Before using Opening Auction, understand how orders or subscriptions are accepted, how allocations occur and what recourse exists after an error or failed settlement; formal rules reduce uncertainty but cannot eliminate failed trades or misconduct.

A record of outstanding buy and sell orders arranged by price and often time priority.

Example: The order book shows buyers at ₦20 and sellers at ₦20.20.

Order Book is a record of outstanding buy and sell orders arranged by price and often time priority; distinguish the quoted market from executable liquidity. A displayed price may cover only a small quantity.

The order book shows buyers at ₦20 and sellers at ₦20.20.

For Order Book, inspect the bid, offer, depth, recent volume, order conditions, fees and settlement cycle; use a limit where price control matters. Liquidity visible in normal markets can disappear during stress.

The completion of a buy or sell instruction.

Example: The broker executes the order in three separate trades.

Order Execution is the completion of a buy or sell instruction; the result of the trading process depends on the order book, spread, depth, volatility, venue rules and priority among competing instructions.

The broker executes the order in three separate trades.

Before using Order Execution, understand the venue's matching rules, trigger conditions, trading hours and treatment during halts or fast markets; fast execution usually requires accepting less control over price. Also compare Partial Fill, defined here as execution of only part of an order.

A decentralised market where participants trade directly or through dealers rather than on a central exchange.

Example: Many corporate bonds trade over the counter.

Over-the-Counter Market is a decentralised market where participants trade directly or through dealers rather than on a central exchange; the function of the market structure is structural: it determines who supplies the security, who receives the cash and how a transaction becomes binding.

Many corporate bonds trade over the counter.

Before using Over-the-Counter Market, understand how orders or subscriptions are accepted, how allocations occur and what recourse exists after an error or failed settlement; the market structure can provide access without guaranteeing liquidity.

Execution of only part of an order.

Example: Only 2,000 of the requested 5,000 shares are available at the limit price.

Partial Fill describes execution of only part of an order; the result of the trading process depends on the order book, spread, depth, volatility, venue rules and priority among competing instructions.

Only 2,000 of the requested 5,000 shares are available at the limit price.

For Partial Fill, inspect the bid, offer, depth, recent volume, order conditions, fees and settlement cycle; use a limit where price control matters. Historical volume does not guarantee liquidity for a specific trade size; Also compare Average Execution Price, defined here as the quantity-weighted average price of all fills in an order.

A period before regular trading when orders may be entered but not continuously executed.

Example: Investors submit orders during pre-open for the opening auction.

Pre-Open Session is a period before regular trading when orders may be entered but not continuously executed; the market structure shapes price formation, transparency, access and liquidity by determining whether transactions occur through an exchange, dealer, auction or negotiated process.

For example, investors submit orders during pre-open for the opening auction.

For Pre-Open Session, identify the venue or process, eligible participants, price-setting method, disclosure, trading hours, fees, clearing and settlement arrangements; formal rules reduce uncertainty but cannot eliminate failed trades or misconduct.

The process through which market orders and information establish a traded price.

Example: New earnings information leads buyers and sellers to agree on a lower price.

Price Discovery is the process through which market orders and information establish a traded price; distinguish the quoted market from executable liquidity. A displayed price may cover only a small quantity.

New earnings information leads buyers and sellers to agree on a lower price.

Before using Price Discovery, understand the venue's matching rules, trigger conditions, trading hours and treatment during halts or fast markets. Also compare Liquidity Provider, defined here as a participant that supplies executable buy and sell interest to a market.

The maximum permitted price movement during a trading period.

Example: A share cannot rise or fall by more than the exchange's daily limit.

Price Limit is the maximum permitted price movement during a trading period; distinguish the quoted market from executable liquidity. A displayed price may cover only a small quantity.

A share cannot rise or fall by more than the exchange's daily limit.

The practical test for Price Limit is whether the order instruction produces the intended exposure at an acceptable all-in execution cost; liquidity visible in normal markets can disappear during stress. Also compare Tick Size, defined here as the smallest permitted price increment for a security.

The market in which newly issued securities are sold and the issuer receives capital.

Example: Investors subscribe to a new government bondA debt security issued by a government or government treasury. in the primary market.

Primary Market is the market in which newly issued securities are sold and the issuer receives capital; this structure describes where securities are issued or traded and the rules through which buyers, sellers or issuers interact.

Investors subscribe to a new government bond in the primary market.

A practical review of Primary Market compares transparency, liquidity, counterparty exposure and all-in cost with available alternatives; different venues and issuance methods can expose the same security to different costs.

A trade quantity equal to a standard lot or a multiple of it.

Example: An order for 500 shares is a round lot when the standard lot is 100.

Round Lot is a trade quantity equal to a standard lot or a multiple of it; the trading process affects how an order reaches the market, interacts with available liquidity and becomes an executed trade or displayed price.

An order for 500 shares is a round lot when the standard lot is 100.

Before using Round Lot, understand the venue's matching rules, trigger conditions, trading hours and treatment during halts or fast markets; liquidity visible in normal markets can disappear during stress.

The market in which existing securities trade among investors.

Example: A bondholder sells an already issued bond to another investor.

Secondary Market is the market in which existing securities trade among investors; this structure describes where securities are issued or traded and the rules through which buyers, sellers or issuers interact.

A bondholder sells an already issued bond to another investor.

For Secondary Market, identify the venue or process, eligible participants, price-setting method, disclosure, trading hours, fees, clearing and settlement arrangements; the market structure can provide access without guaranteeing liquidity. Also compare Over-the-Counter Market, defined here as a decentralised market where participants trade directly or through dealers rather than on a central exchange.

The temporary transfer of securities to a borrower in exchange for collateral and a fee.

Example: A fund lends shares to a short seller and earns lending income.

Securities Lending is the temporary transfer of securities to a borrower in exchange for collateral and a fee; the trading process belongs to market microstructure: it explains the path between an investor's decision and the price actually obtained.

A fund lends shares to a short seller and earns lending income.

For Securities Lending, inspect the bid, offer, depth, recent volume, order conditions, fees and settlement cycle; use a limit where price control matters. Historical volume does not guarantee liquidity for a specific trade size.

The difference between the expected trade price and the actual execution price.

Example: A large market orderAn instruction to buy or sell immediately at the best available prices. expected at ₦10 fills at an average of ₦10.15.

Slippage is the difference between the expected trade price and the actual execution price; the trading process belongs to market microstructure: it explains the path between an investor's decision and the price actually obtained.

For example, a large market order expected at ₦10 fills at an average of ₦10.15.

Evaluate Slippage from execution records: decision price, submitted order, fills, average price, fees, slippage and any unexecuted balance. Also compare Fill, defined here as the completed portion of an order.

A marketplace where shares, ETFs, REITs, bonds, and other securities may trade.

Example: An investor buys units of a listed ETF through a broker during market hours.

A stock exchange is an organised market where eligible securities can be bought and sold under published rules. It admits issuers and trading members, distributes prices and supports market supervision. Shares, bonds, exchange-traded funds and real estateLand and buildings held for use, rental income, development, or appreciation. investmentAn asset or commitment of money made with the expectation of future income, growth, or both. trusts may all be listed, depending on the exchange.

An investor sends an order through a licensed broker to buy shares listed on the Nigerian ExchangeNigeria's principal securities exchange, where listed shares, bonds, ETFs, and other instruments trade.. The exchange's trading system matches it with a seller at an available price, after which clearing and settlement processes transfer the money and record the securities in the buyer's account.

Listing on an exchange improves access and disclosure but does not make a security safeA contract providing a right to future equity under specified financing or liquidity events, without being ordinary debt. or easy to sell. Check trading volume, bid–ask spread, trading hours, fees and settlement arrangements. Also distinguish the exchange from the broker that handles the order and the depository that records the resulting ownership.

The smallest permitted price increment for a security.

Example: With a one-kobo tick size, quotes move from ₦10.00 to ₦10.01.

Tick Size is the smallest permitted price increment for a security; the result of the trading process depends on the order book, spread, depth, volatility, venue rules and priority among competing instructions.

With a one-kobo tick size, quotes move from ₦10.00 to ₦10.01.

The practical test for Tick Size is whether the order instruction produces the intended exposure at an acceptable all-in execution cost; historical volume does not guarantee liquidity for a specific trade size. Also compare Lot Size, defined here as the standard quantity in which a security or contract trades.

The average price over time, commonly used as an execution benchmark or scheduling method.

Example: The order is split into equal portions every 15 minutes.

Time-Weighted Average Price is the average price over time, commonly used as an execution benchmark or scheduling method; the trading process affects how an order reaches the market, interacts with available liquidity and becomes an executed trade or displayed price.

The order is split into equal portions every 15 minutes.

The practical test for Time-Weighted Average Price is whether the order instruction produces the intended exposure at an acceptable all-in execution cost. Also compare Best Execution, defined here as the duty or process of seeking the most favourable reasonably available trading outcome for a client.

A temporary suspension of trading in a security or market.

Example: The exchange halts a share pending clarification of material news.

Trading Halt is a temporary suspension of trading in a security or market; the result of the trading process depends on the order book, spread, depth, volatility, venue rules and priority among competing instructions.

The exchange halts a share pending clarification of material news.

The practical test for Trading Halt is whether the order instruction produces the intended exposure at an acceptable all-in execution cost; liquidity visible in normal markets can disappear during stress.

The number or value of securities traded during a period.

Example: Five million shares change hands during the session.

Trading Volume is the number or value of securities traded during a period; distinguish the quoted market from executable liquidity. A displayed price may cover only a small quantity.

For example, five million shares change hands during the session.

Evaluate Trading Volume from execution records: decision price, submitted order, fills, average price, fees, slippage and any unexecuted balance. Also compare Turnover Value, defined here as the monetary value of securities traded during a period. The conclusion should remain tied to the purpose, period and assumptions stated for Trading Volume rather than being extended to a different decision.

The monetary value of securities traded during a period.

Example: The exchange records ₦3 billion in daily turnover value.

Turnover Value is the monetary value of securities traded during a period; the trading process affects how an order reaches the market, interacts with available liquidity and becomes an executed trade or displayed price.

The exchange records ₦3 billion in daily turnover value.

Evaluate Turnover Value from execution records: decision price, submitted order, fills, average price, fees, slippage and any unexecuted balance; an order can be valid and still remain unfilled. Also compare Liquidity Provider, defined here as a participant that supplies executable buy and sell interest to a market.

The average traded price weighted by volume during a period.

Example: An execution algorithm tries to buy near the day's VWAP.

Volume-Weighted Average Price is the average traded price weighted by volume during a period; the trading process affects how an order reaches the market, interacts with available liquidity and becomes an executed trade or displayed price.

An execution algorithm tries to buy near the day's VWAP.

Before using Volume-Weighted Average Price, understand the venue's matching rules, trigger conditions, trading hours and treatment during halts or fast markets; an order can be valid and still remain unfilled.