What happened: Every trade you place goes through a high-speed, invisible journey. Before your order hits the exchange, it passes through your broker’s automated checkpoints—verifying your margin, risk limits, and compliance. Once cleared, it reaches the exchange’s matching engine, which pairs you with another trader to finalize the transaction.
Why it matters: Understanding this process helps you see why slippage occurs and why execution prices can vary. By knowing that liquidity, order routing, and matching engines are at play, you can manage your expectations during volatile market conditions and trade with more confidence.
