What does "executing a trade" mean?

"Executing a trade" specifically refers to the act of completing a buy or sell order for a security in the financial markets. This process involves triggering the transaction, thereby transferring ownership of the security from one party to another based on the agreed-upon price and conditions. When an investor places a trade order, it can be either a market order (which is executed immediately at the current market price) or a limit order (which is executed at a specified price or better). This action is crucial in the functioning of financial markets, as it directly impacts price movement and market liquidity.

The other options relate to aspects of investing and market analysis but do not define the act of executing a trade itself. Planning an investment strategy, analyzing market trends, and evaluating performance are all essential components of investing but occur before or after a trade has been executed rather than describing the execution process itself.