Trade Strategy and Execution

Free CFA Level III: Portfolio Management lesson in Trade Strategy & Execution. 15 min read, ~2,306 words.

Trade motivation drives urgency: alpha-decay demands speed, rebalancing tolerates patience, margin calls override everything (motivations span alpha, risk, cash, corporate action, margin). Strategy inputs are order characteristics, security characteristics, market conditions, and risk tolerance; the optimum balances market impact against timing risk. Implementation Shortfall = paper return minus actual return...

What this lesson covers

• Content
• Example 1
• Example 2
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

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