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2018issue C0359

Routing equivalent contracts across competing venues

By 2018, listing venues were competing across borders and no longer needed a national franchise or a physical trading floor. Similar contracts can be listed on more than one exchange, so the executable order starts with the matching contract, a reachable venue, and a comparison of documented speed, liquidity, protections, and all-in cost.

  • Similar contracts can be listed on more than one exchange, so contract selection includes comparing those alternatives before an order is sent.
  • A broker must be able to send business to the chosen venue before a venue preference can be executed.
  • Venues distinguish themselves through the contracts they list, trading volume, execution speed, pricing, and investor protections.
  • Because venue listings and product attributes change, current contract specifications must be taken from the exchange that handles the instrument.
Entries in this reading3 entries
Current trackOrder routing65 readingsCommission analysis83 readingsFutures contract selection91 readings

Venues compete across borders

By 2018, listing venues were competing across borders and no longer needed a national franchise or a physical trading floor. Venues distinguish themselves through the contracts they list, trading volume, execution speed, pricing, and investor protections.

Wider venue choice was described as reducing transaction costs and ending exclusive venue control of listed products.

Select the contract, then confirm the route

Similar contracts can be listed on more than one exchange, so futures-contract-selection includes comparing those equivalent-products before an order is sent. The chosen instrument has to match the intended exposure.

A broker must be able to send business to the chosen venue before a venue preference can be executed. Order-routing is sending that order to the chosen execution venue instead of accepting a default destination.

Compare implementation cost and keep the record

Venue-differentiation is how listing venues compete on product design, volume, speed, pricing, and investor protections. Commission-analysis compares venue fees and other implementation charges that change the all-in cost of a fill.

Detailed trade records at the venue help resolve execution disputes by referring back to documented events. Trade-documentation is the venue record of fills and events used to reconstruct what happened in a dispute.

Because venue listings and product attributes change, current contract specifications must be taken from the exchange that handles the instrument.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
26 of 30 in the Order routing track
201859-59 pp.Next on Order routingForex venue selection by fill speed, margin terms, and price honorConfirm pair-coverage first so the venue will accept the specific currency pair or cross you intend to trade.
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 year2018172 readings
All 65 readings tagged Order routing
Also on Order routing5 readings
2014Comparing exchange venues before routing the order2017Venue routing for equivalent listed contracts2001Ticket charges, internalization, and hidden size on the tape2002Market-order routing, internalization, and displayed size2003Cheaper access still left a routing and cost problem