How Do Retail Traders Typically Execute Large Orders without Using an OTC Desk?
Retail traders typically execute large orders by splitting them into smaller limit or market orders over time, a strategy known as "iceberging" or time-weighted average price (TWAP) trading. This attempts to minimize market impact and slippage.
They rely on the liquidity provided by public exchanges and smart order routers to get the best possible execution.
Glossar
Large Orders
Execution Venue Selection ⎊ Large Orders present a challenge in achieving minimal market impact, requiring traders to slice the order across multiple venues or utilize dark pools to source liquidity without revealing full intent prematurely.
Market Orders
Execution ⎊ Market orders, within cryptocurrency, options, and derivatives, represent instructions to buy or sell an asset at the best available price immediately.
Retail Traders
Participant ⎊ Retail traders represent the segment of market participants executing trades for their personal accounts, typically with smaller capital allocations compared to institutional or quantitative funds.