> For the complete documentation index, see [llms.txt](https://docs.tread.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tread.fi/creating-and-submitting-orders/strategies/impact-minimization.md).

# Impact Minimization

<figure><img src="/files/AgMYhztpSzvnjgrSA4Ut" alt=""><figcaption><p>Execution with Impact Minimization</p></figcaption></figure>

The **Impact Minimization** strategy is designed for traders who prioritize reducing market impact while maintaining execution efficiency. It follows a [**VWAP (Volume Weighted Average Price) trajectory**](/creating-and-submitting-orders/advanced-settings/trajectories/vwap.md), ensuring trades are distributed over time to minimize price disruption.

**How It Works**

* Users specify a **duration**, defining the execution time frame.
* The engine prioritizes **maker execution** to optimize cost efficiency but will use **taker execution** when necessary to stay within the set duration.
* Orders are executed **incrementally** along a VWAP trajectory, ensuring small portions of the trade are spread out over time.
* Market impact relative to **arrival price** is minimized through passive execution.
* Execution dynamically adjusts based on **real-time market conditions**.

**When to Use This Strategy**

* **Fixed Duration Execution** – Suitable for traders who need execution over a **specific time frame**.
* **High Sensitivity to Market Impact** – Helps reduce market disruption when executing **large orders**.
* **Manageable Taker Fees** – Works best when taker fees are reasonable, ensuring cost-effective execution.
* **Market-Aware Execution** – The engine continuously adapts to market conditions to optimize order placement.

**Potential Drawbacks**

* **Higher Variance in Execution Outcomes** – Market conditions can impact final trade results.
* **Fixed Duration Constraints** – If liquidity shifts unexpectedly, taker execution may increase to meet the deadline.
* **Limited Flexibility for Short Durations** – Shorter execution windows may reduce the ability to optimize order placement.

This strategy is ideal for **large trades requiring minimal market impact** while leveraging **market-aware execution** for cost efficiency.

#### **Impact Minimization Configurations**

| [Trajectory](/creating-and-submitting-orders/advanced-settings/trajectories.md)               | [VWAP](/creating-and-submitting-orders/advanced-settings/trajectories/vwap.md) |
| --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ |
| [Passiveness](/creating-and-submitting-orders/advanced-settings/passiveness.md)               | 0.02                                                                           |
| [Discretion](/creating-and-submitting-orders/advanced-settings/discretion.md)                 | 0.06                                                                           |
| [Alpha Tilt](/creating-and-submitting-orders/advanced-settings/alpha-tilt.md)                 | 0                                                                              |
| [Max OTC Percentage](/creating-and-submitting-orders/advanced-settings/max-otc-percentage.md) | 0%                                                                             |
| [Passive Only](/creating-and-submitting-orders/advanced-settings/passive-only.md)             | Disabled                                                                       |
| [Active Limit](/creating-and-submitting-orders/advanced-settings/active-limit.md)             | Disabled                                                                       |
| [Reduce Only](/creating-and-submitting-orders/advanced-settings/reduce-only.md)               | Disabled                                                                       |
| [Strict Duration](/creating-and-submitting-orders/advanced-settings/strict-duration.md)       | Disabled                                                                       |