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2017issue C0359

Venue choice as an order-routing filter

The first execution choice is which venue may receive the order. Compare equivalent listings, confirm the broker can reach that marketplace, and weigh trade documentation, speed, and implementation cost before the order is sent.

  • Similar products can be listed on more than one marketplace, so the first execution choice is which venue is allowed to receive the order.
  • When equivalent listings exist, compare those contracts and confirm the broker can send the order to the chosen marketplace.
  • Venues differ by product, available volume, matching speed, pricing, and investor protections, not by geography alone.
  • A complete venue record of trades makes disputed fills easier to reconstruct against documented events.
Entries in this reading1 entry
Current trackOrder routing65 readings

Which venue may receive the order

Similar products can be listed on more than one marketplace. The first execution choice is which venue is allowed to receive the order.

A venue lists an instrument and matches incoming orders. An equivalent listing is a similar contract on another marketplace that can represent the same economic exposure.

What differentiates a marketplace

Marketplaces differentiate on the product listed, available volume, matching speed, pricing, and investor protections rather than on geography alone. Investor protections are the rules and safeguards a marketplace applies to participants and their orders.

A marketplace need not occupy a national or physical location. The attributes that matter for routing are the product, the book, and the cost of reaching it.

Directed routing and implementation cost

When equivalent instruments exist on several venues, compare those listings and confirm the broker can send the order to the chosen marketplace.

Directed routing sends the order to that chosen marketplace instead of accepting the broker default. Implementation cost is the combined effect of fees, spread, speed, and fill quality once the order is sent.

Trade documentation and venue competition

A complete venue record of trades makes disputed fills easier to reconstruct against documented events. Trade documentation is that venue record of order and fill events.

Greater competition among venues has been associated with lower transaction costs and weaker exclusive control by any single marketplace.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
22 of 30 in the Order routing track
201759-59 pp.Next on Order routingVenue routing for equivalent listed contractsOrder-routing means sending an order to a chosen executable venue rather than accepting the broker's default destination.
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 year2017182 readings
All 65 readings tagged Order routing
Also on Order routing5 readings
1986Open outcry hand signals as order routing1988Why instant basket routing overwhelms specialist liquidity1989Finishing a market order in a first index-pit session1995Canceled prints versus executable fills1999Direct access routing and the visible book