Define ‘Best Execution’ and How It Applies to Dark Pool Trading

Best execution is the obligation of a broker or execution venue to take all reasonable steps to obtain the most favorable terms for a client's order, considering factors like price, cost, speed, and likelihood of execution and settlement. In dark pool trading, this means the broker must demonstrate that routing the order to the non-public venue was likely to achieve a better outcome (e.g. better price or less market impact) than executing it on a public exchange.