Filter by Categories
Accounting
Banking

Exchanges




Disadvantages of Implementation Shortfall


Implementation shortfall (IS) is defined as a measure of trading inefficiency– i.e., it measures the cost of trade implementation. For purchases (long positions), it is equal to the decision price or desired price (the price prevailing at the time a trader/ investor decides to trade- i.e., submits the order to the buy-side trading desk) minus the average execution price (actual price or transaction price or arrival price), including commissions, all related to the decision price.

Its disadvantages are as follows:

  • It might turn out to be an unfamiliar methodology for evaluating traders.
  • It requires collection and evaluation of more extensive data.
  • Maintenance of the extensive data is a daunting work.


Tutorials
This section contains quite a vast collection of easy-to-understand explanatory manuals, practical guides, and best practices how-tos covering the main themes of this ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*