What it means
Once a trade has been executed, its actual fills can be compared with the price and conditions recorded before the order was placed. This review separates what was planned from what happened. It can examine fill prices, quantities, timing, commissions and whether an order was only partly filled.
Post-trade analysis may also track what happened to the stock afterward. That is a different question from execution quality: a favorable later price move does not, by itself, mean the order received a good fill. Likewise, an unfavorable move does not prove the execution was poor.
How it is calculated
There is no single universal post-trade score. One common measure is implementation shortfall: the difference between an executed order's cost and its value at the price recorded when the trading decision was made. For a fully filled stock order, excluding fees:
Implementation shortfall (US$) = side × quantity (shares) × (average fill price − decision price) (US$/share)
- Side is +1 for a buy and −1 for a sell. This convention makes a worse fill a positive cost for either side.
- Quantity is the number of shares filled.
- Average fill price is the share-weighted average of actual execution prices:
sum(fill quantity × fill price) / total shares filled. - Decision price is the recorded reference price at the time of the trading decision. It must not be replaced afterward with a more convenient price.
To include commissions and other explicit fees, add them in US$. For a partial fill, this simple formula measures only the filled shares; a fuller implementation-shortfall analysis also specifies how to value the unfilled portion. The result is an execution measure, not the trade's investment return.
Worked example
Consider a hypothetical decision to buy 100 shares when the recorded decision price is US$50.00. The order receives two fills:
- 40 shares at US$50.10:
40 × US$50.10 = US$2,004. - 60 shares at US$50.20:
60 × US$50.20 = US$3,012.
The total spent on shares is US$5,016, so the average fill price is US$5,016 / 100 = US$50.16. At the decision price, 100 shares would have cost US$5,000. The filled-share implementation shortfall is +1 × 100 × (US$50.16 − US$50.00) = US$16.
If the hypothetical commission is US$1, the combined measured cost is US$17, or US$17 / US$5,000 × 10,000 = 34 basis points of the decision-price value. That figure describes this example's execution relative to its stated benchmark; it says nothing about the stock's subsequent return.
Why it matters before you trade
A useful post-trade comparison starts with information recorded before execution. Note the intended side and quantity, the decision price and time, the proposed execution conditions, and which costs a later review will include. Otherwise, changing the benchmark after seeing a fill can make a comparison misleading.
A pre-trade check estimates possible friction, such as spread and market impact, while post-trade analysis compares those expectations with observed fills. Differences can help identify questions for a future execution plan, but one trade cannot establish that an estimate or strategy is generally reliable.
How PreTrAIde uses it
PreTrAIde provides pre-trade analysis of a stock basket before an order is placed; it does not receive, transmit or execute orders. Its quantitative layer estimates spread and market impact. Its GO, NO-GO and MODIFY verdicts are decision support, not recommendations or guarantees.
Afterward, users can log whether they executed, partially executed or skipped a trade, including real fill prices. PreTrAIde measures outcomes from market data and builds a per-account memory that personalizes later analyses in the AI layer; the quantitative scores remain identical. Users can pause or erase that memory. A paper-trading simulation is also available after a verdict, but simulated results are not actual fills.
Common mistakes
- Confusing execution cost with profit or loss. A fill comparison and a later investment outcome measure different things.
- Ignoring incomplete orders. Filled-share cost alone omits the consequences of shares that were not executed.
- Mixing benchmarks. Decision price, arrival price and market midpoint can produce different answers; label the one used.
- Leaving out fees or using mismatched units. State whether costs include commissions and whether the result is in US$ or basis points.
- Treating a single result as proof. Market conditions, order size and execution constraints can differ across trades.