SmartRouting

IB SmartRouting Overview

The Smartest Trades use IB SmartRouting^SM. IB SmartRouting searches for the best firm stock, option, and combination prices available at the time of your order, and seeks to immediately execute your order electronically.

Our statistics speak for themselves. Based on independent measurements, the Transaction Auditing Group, Inc., (TAG), a third-party provider of transaction analysis, has determined that Interactive Brokers US stock and options price executions were significantly better than the industry⁽¹⁾ during the first half of 2009. Unlike other industry touted statistics that highlight the percent of orders improved but don't consider the dollar amount of the improvement, TAG's statistics factor in the amount of the improvement, including executions which had dis-improvement and no improvement.

Unlike other smart routers, IB SmartRouting never relinquishes the control of your order. It continuously evaluates fast changing market conditions and dynamically re-routes all or parts of your order seeking to achieve optimal execution and maximize your rebate.
IB SmartRouting represents each leg of a spread order independently and enters each leg at the best possible venue. This technology is so sound that IB undertakes the risk of partially executed spread orders by placing them into our error account.
IB SmartRouting Autorecovery^SM re-routes your US options order in the case of an exchange malfunction, with IB undertaking the risk of double executions.

Net Dollar Price Improvement⁽²⁾

TWS customers with the unbundled pricing structure will also have the option to select a custom Smart strategy for non-marketable stock orders, based on their trading objectives. You can elect to have a non-marketable order routed to:

The exchange with the highest rebate;
The listing exchange on the symbol;
The highest volume exchange that has a rebate for adding liquidity;
The highest volume exchange that charges the lowest fee for taking liquidity;

To upgrade to the unbundled pricing structure, log into Account Management, and in the Account Administration section select Pricing Structure.

Notes:

¹Source: The Transaction Auditing Group (TAG). Industry as a whole for the referenced periods according to TAG.

About TAG
Since 1996, TAG has been the leader in independent Best Execution analysis throughout the US and now, Europe. Its products offer comprehensive assessment of execution quality for equities and options, utilizing massive real time market data and archival capabilities with proprietary measurement tools to create standardized and custom reports. TAG provides business intelligence to gain market share, differentiate from competitors, and validate performance.

For more information visit www.tagaudit.com. The Transaction Auditing Group, Inc. (TAG), an independent company, is not affiliated with Interactive Brokers. The statistics provided by TAG are from sources believed to be reliable, but TAG makes no representation as to the completeness or fitness for any particular purpose. Information produced by TAG is copyrighted and any unauthorized use, duplication, redistribution or disclosure is prohibited.

²Net $ Improvement per Share Definition

((# of Price Improved Shares * Price Improvement Amount) - (# of Price Disimproved Shares*Price Disimprovement Amount))

Total Number of Executed Shares

The routing flowchart tabs are intended to provide a general description of how orders are processed by IB Smart Routing systems, and do not encompass all of the routing logic employed by those systems. This information is subject to change. Please see IB's Order Routing Disclosure and Order Routing Disclosure for Canadian Stocks, and the related disclaimer for additional information.
In addition to IB SmartRouting, we also offer direct routing to your choice of exchanges around the world. See our Exchanges page for more details.
Interactive Brokers LLC is a member of NYSE/FINRA/SIPC. Supporting documentation for any claims and statistical information will be provided upon request.
The analysis for stocks included all market orders of 100 shares or more up to 10,000 shares.
The analysis for options included all market orders with order sizes of 1 to 50 contracts.
For instructions on how to exclude specific exchanges from being considered in the order routing flow, see the TWS Users' Guide.
For a list of the destinations included in the Smart routing algorithm, hold your mouse over the Information balloon in the Exchange field of a TWS market data line.