IB SmartRouting Overview
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 and European stock1 price executions continued to be significantly better than the industry2 during the second half of 2013.
What other brokers conveniently leave out
Our results are even more impressive when you consider that other industry-touted statistics don't give you the whole picture. They only discuss the percentage of orders that saw price improvement, and conveniently ignore the percentage of their orders that were dis-improved or had no improvement. In contrast, our statistics are netted, showing the true bottom-line price improvement including all improved, dis-improved and unimproved amounts.
- Unlike other smart routers, IB SmartRouting never routes and forgets about 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.
- IB SmartRouting AutorecoverySM re-routes your US options order in the case of an exchange malfunction, with IB undertaking the risk of double executions.
- To help provide price improvement on large volume and block orders and take advantage of hidden institutional order flows that may not be available at exchanges, IB includes eight dark pools in its SmartRouting logic.
Our smart router takes into account transaction costs along with the fee or rebate for taking/adding liquidity when determining where to route your marketable order when the inside market is shared by multiple exchanges. For customers who want even more control of their orders, TWS customers can specify stock and options smart routing strategies for non-marketable orders. For stocks, customers with the Cost Plus pricing structure can elect to have their non-marketable orders 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.
For options, customers can choose to send their non-marketable Smart routed orders to the exchange offering the highest rebate. These routing directives can be set on a per-order basis from the "Misc" tab of the Order Ticket, or as a global default setting from the Smart Routing configuration page.
- The TAG analysis for US stocks included all market orders of 100 shares or more up to 10,000 shares. The analysis for US options included all market order sizes in US options and includes exchange rebates received by customers under IB's cost-plus pricing structure. The TAG analysis of orders routed to exchanges in Europe included all orders routed for execution during regular trading hours including all market and marketable limit orders and orders near the market (orders having a limit price within one-tenth of a Euro from the quote price at time of order receipt) on stocks listed on the included exchanges, weighted by the volume executed on each exchange. The exchanges for European stocks are XETRA, EURONEXT, CHI-X, WIENER BORSE, TURQUOISE, LONDON and NASDAQ OMX.
- Source: The Transaction Auditing Group (TAG). Industry as a whole for the referenced periods according to 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.
- Net $ Improvement per Share Definition
|((# of Price Improved Shares * Price Improvement Amount) - (# of Price Disimproved Shares * Price Disimprovement Amount))
|Total Number of Executed Shares
- 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.
- 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. For instructions on how to exclude specific exchanges from being considered in the order routing flow, see the TWS Users' Guide.
- Interactive Brokers LLC is a member of NYSE/FINRA/SIPC. Supporting documentation for any claims and statistical information will be provided upon request.