An execution can look favourable against the quote when an order reached the market and unfavourable against the price when the investment decision was made. The benchmark defines the question being answered.
Execution quality has more than one measure
The SEC’s March 2024 announcement on Rule 605 amendments describes changes to execution-quality reporting, including order categorisation, time-to-execution information and spread-related measures. That historical announcement supports examining multiple dimensions of execution; it is not a claim about the present implementation status of every reporting requirement. SEC — Order execution disclosure amendments, 6 March 2024
Separate the delay from the final fill
Assume an investor decides to buy 1,000 shares when a chosen reference price is $10.00. When the order reaches the execution process, a comparable reference is $10.10. The eventual average fill is $10.08. All figures are hypothetical, and the example initially excludes explicit charges.
Against the decision price, the purchase costs $80 more: 1,000 multiplied by $0.08. Against the arrival reference, it costs $20 less: 1,000 multiplied by minus $0.02. Both comparisons are mathematically correct, but they describe different intervals.
Under these assumptions, the change before arrival contributes $100, and the difference after arrival contributes minus $20, giving the total $80. This arithmetic is a decomposition of the chosen benchmarks. It does not establish that the broker caused every movement in either interval.
If explicit charges are $5, total cost against the decision reference becomes $85. If only half the intended quantity fills, evaluating the completed shares alone omits the unfilled portion. Any treatment of that remainder needs a stated valuation time and method rather than an invented execution.
The type of reference matters as well. A midpoint, last trade and executable ask are different observations. Comparisons should name the selected measure, record its timestamp and explain why it is suitable for the order’s direction and size.
Fix the method before comparing providers
Define the decision time, arrival time, reference-price convention and fee treatment before reviewing results. Apply the same method to comparable orders and preserve partial-fill information.
A low average slippage figure can conceal different order sizes, market conditions or excluded costs. The useful result explains which interval was measured and what remains outside it. A benchmark is a tool for accountability when its meaning stays stable.