Definition ∞ Trade splitting involves dividing a large order for a digital asset into smaller, multiple orders executed at different times or across various exchanges. This strategy aims to minimize market impact, reduce slippage, and potentially achieve a better average execution price. It is often employed by institutional traders or large investors to avoid significantly moving the market with a single, substantial transaction. This technique helps in managing liquidity and price volatility.
Context ∞ The discussion around trade splitting is relevant to advanced trading strategies and market microstructure in digital asset markets. News reports sometimes refer to sophisticated trading algorithms that utilize such techniques. A key debate involves the fairness implications of large players using these methods to optimize their execution, potentially at the expense of smaller market participants.
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