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2014issue C0263

Comparing exchange venues before routing the order

Identifying every venue that handles a contract is part of choosing how an order will be executed. Compare equivalent listings first, then use venue routing only where the broker can send the business and trade documentation can reconstruct what happened.

  • Overlapping products make identifying every venue that handles a contract part of choosing how an order will be executed.
  • Venues compete on product, volume, speed, pricing, and investor protections rather than on national borders or a physical trading floor.
  • Comparable products should be reviewed on more than one exchange before a contract is selected.
  • An order is executable at the intended venue only if the broker can send the business there.
Entries in this reading3 entries
Current trackOrder routing65 readingsCommission analysis83 readingsFutures contract selection91 readings

Venue choice is part of execution

Overlapping products across competing exchanges make identifying every venue that handles a contract part of choosing how an order will be executed. That pattern is exchange competition: overlapping products across venues that let traders redirect business instead of treating one market as exclusive.

Venues were described as competing on product, volume, speed, pricing, and investor protections rather than on national borders or a physical trading floor. Investor protections are venue rules and safeguards that sit beside product, volume, speed, and price when comparing where to trade.

Wider choice among venues was linked to falling transaction costs and the end of exclusive exchange control over a product.

Review equivalent listings before a contract is selected

Comparable products should be reviewed on more than one exchange before a contract is selected. An equivalent listing is a comparable contract on another exchange that can stand in for the same trade idea.

Implementation cost is the combined effect of pricing, volume, speed, and related trading frictions once the order is live.

Route only where the order is executable

Venue routing means sending an order to a chosen exchange rather than accepting a broker default location. An order is executable at the intended venue only if the broker can send the business there.

Extensive trade documentation was recommended so execution disputes can be reconstructed from recorded events. Trade documentation is venue records that reconstruct what happened so an execution dispute can be resolved.

Exchange and product details should be checked at the venue because posted resource listings can change and are not independently guaranteed.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
14 of 30 in the Order routing track
201455-55 pp.Next on Order routingSelecting a futures broker as an execution-architecture problemRetail futures traders who are not exchange members must be associated with a futures commission merchant, either directly or through an introducing broker, before their orders can be executed.
All readings on this track · 30 readings
  1. 1988Why instant basket routing overwhelms specialist liquidity
  2. 2004Retail forex tickets as implementation-cost contracts
  3. 2005A two-gate liquidity filter for futures order routing
  4. 2006Manual after-hours routing and open-outcry fill risk
  5. 2010A futures brokerage quote is an execution specification
  6. 2011Smart order routing, maker-taker, and midpoint execution costs
  7. 2012Compare equivalent listings before routing
  8. 2012Rebate-aware routing and execution cost
  9. 2012Platform routing, fees, and server-side stops
  10. 2013Compare equivalent listings, then route the order
  11. 2013Confirm routing, margin, and fill cost before a live forex order
  12. 2013Brokerage choice as an execution-cost and routing filter
  13. 2014Order routing, pass-through rebates, and liquidity choice
  14. 2014Comparing exchange venues before routing the order
  15. 2014Selecting a futures broker as an execution-architecture problem
  16. 2014Commission shopping is the wrong first filter for a futures order
  17. 2015Routing orders when equivalent products trade on multiple venues
  18. 2015Forex venue checks for speed, margin, and implementation cost
  19. 2015Backup venues and symbol splits in futures routing
  20. 2016Route orders across competing exchange venues
  21. 2016Filter exchange venues before routing orders
  22. 2017Venue choice as an order-routing filter
  23. 2017Venue routing for equivalent listed contracts
  24. 2017Forex broker checks for fill speed, quote honor, and margin
  25. 2017Brokerage choice as an execution-speed and commission filter
  26. 2018Routing equivalent contracts across competing venues
  27. 2018Forex venue selection by fill speed, margin terms, and price honor
  28. 2019Forex execution filters for routing, cost, and liquidity
  29. 2020Routing equivalent listings across competing exchanges
  30. 2020Brokerage filters for routing, commissions, and liquidity
By fieldOrder types and routing87 readingsBy year2014163 readings
All 65 readings tagged Order routing
Also on Order routing5 readings
2017Venue routing for equivalent listed contracts2018Routing equivalent contracts across competing venues2001Ticket charges, internalization, and hidden size on the tape2002Market-order routing, internalization, and displayed size2003Cheaper access still left a routing and cost problem