What Is “Best Execution” in the Context of Financial Trading?

Best execution is the requirement for a broker or trading venue to execute client orders on terms that are most favorable to the client. This includes factors like price, speed, likelihood of execution, and overall cost.

In transparent markets, it is easier to prove best execution. In dark pools or OTC, the lack of a public order book makes demonstrating this a challenge, relying more on the counterparty's reputation.