Best Execution Strategy for Illiquid Stock Order

A portfolio manager is assessing the impact of different execution strategies on a large order for a client whose portfolio is valued at $500 million. The order involves purchasing an illiquid stock that has a daily trading volume averaging 100,000 shares at a price of $50. The manager is considering three different execution strategies:

• Strategy 1: Implement a complete fill of the order within the first trading hour to take advantage of a potential price spike.
• Strategy 2: Use a percentage-of-volume strategy to execute the order over the course of several days, aiming to trade a set percentage of the stock's average daily volume.
• Strategy 3: Execute the entire order at the end of the trading day to minimize the market impact.

Given these strategies, the manager must decide which one would likely lead to the best execution in terms of minimizing market impact while maximizing execution quality.