DEFINITION of 'Manual Execution'

Manual execution is a method of trading that requires the help of a dealer or broker and their representatives on the floor of an exchange. This can be contrasted against trading automatically which does not involve broker/dealer representatives. Automatic trades are usually sent through an electronic exchange which matches buy and sell orders quickly. People are not involved. Manual executions are usually sent to the market via phone or electronic message, but might be manually traded via floor brokers for execution. Therefore, manual executions tend to be slower than automatic/electronic ones. Quick executions of a fully electronic or automatic execution may give investors a time advantage. Different fees are charged by exchanges for manual executions versus automatic executions. Manual executions are usually more expensive because they require more resources than electronic executions which are matched purely via computer system.

BREAKING DOWN 'Manual Execution'

Manual executions are not executed via the fully automated electronic networks set up by markets. Securities traded manually require several extra steps to process the trade and can take several minutes to actually be executed. Since stock and forex markets are so fast paced where millions of transactions are done in minutes and the price of a stock or currency can rise or fall almost instantly, a manual execution could place investors at a disadvantage.

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