Stake Academy - Trade Execution

The pipes that carry orders between traders, brokerages and stock exchanges function like a well-oiled machine. Designed to deliver the best possible outcome for investors within a fraction of a second, they are close to an engineering masterpiece. Let’s not just wax lyrical and take a look beneath the surface.

What happens when you hit buy or sell on the Stake app?

There are a few steps that take place to make sure you get the best execution price possible.
To start, Stake sends your order to our US-based broker, DriveWealth. This happens within milliseconds. Trade execution systems are designed to ensure the best price without compromising on time. Once your order arrives with DriveWealth, a number of different events may happen.

Let’s introduce NBBO and it will make a bit more sense.

The National Best Bid and Offer. 

The Securities and Exchange Commission mandates that brokers deliver the lowest possible ask price for all buyers, and the highest possible bid price for all sellers.

One of the benefits of the US market is how diverse and competitive it is. While the New York Stock Exchange and Nasdaq are the most well known, there are actually 13 exchanges in the states. From Philadelphia’s PHLX to a handful of Chicago based exchanges as well as many more. On each of these exchanges, there are slight discrepancies in price and your order can be filled on any of the exchanges which offers the best price. The NBBO is a compilation of bids and asks across all exchanges.

Stake and our broker DriveWealth have an obligation to find the best possible price on any of these exchanges to execute your order against.

The Executing Broker

DriveWealth will send orders to an executing broker who secures the best price, execute the trade, and return confirmation. This whole process occurs within fractions of a second. By the time you return to your Stake dashboard, the shares are already there.