How Does Guaranteed Execution Differ from Best Effort Execution in Trading?

Guaranteed execution, often provided by principal OTC desks, means the price quoted at the time of the agreement is the price the investor will receive, with no slippage. Best effort execution, typical on agency exchanges, means the order will be executed at the best available price at the time of execution, but the final price may differ from the price when the order was placed, meaning slippage can occur.