Configure SmartRouting

You can define event-specific directives for contracts routed through SmartRouting, such as excluding quotes, setting a price cap by defining the acceptable distance from the NBBO, and specifying a strategy for non-marketable orders.

To modify SmartRouting functionality

  1. OpenGlobal Configuration.
    • From within Mosaic, use the File menu.
    • From within Classic TWS, use the Edit menu.
  2. Click Smart Routing in the left pane.
  3. Use the right panel to set these parameters:

Excluded Quotes

  • Exclude exchanges with non-firm quotes
  • Exclude exchanges with non-electronic quotes
    If this option is selected, best efforts are used to determine which exchanges’ quotes are immediately automatically executable, and which exchanges’ quotes would require manual (human) handling, and SMART will route only to those exchanges offering automatic execution. Please note that while best efforts are used, it is not always possible to determine whether a quote is automatically executable.
  • Maximum allowable distance from NBBO
    Define the NBBO price cap by entering the "maximum allowable distance from NBBO." Note that NBBO price capping supersedes the exclusion of non-firm quotes, i.e. your order will be routed to a non-firm quote within the price cap over a firm quote outside the price cap.

Note: IMPORTANT If you choose to: a) exclude quotes from certain exchanges; b) exclude non-firm quotes; or c) exclude non-electronic quotes, your order may not be executed at the best posted price nationally (the “NBBO”). This is because one of the exchanges that you chose to exclude might have the best posted price but that exchange will be bypassed by the SmartRouting system on your instruction.

In addition, if you exclude certain exchanges from the eligible SmartRouting destinations and your order is routed to another exchange with an inferior posted price, your order may not be executed by the exchange to which it is sent because that destination may not be willing to execute at an inferior price, or your order may not be marketable at that exchange. You should carefully evaluate all of these factors before deciding whether to exclude certain exchanges from the eligible SmartRouting destinations.

Routing Configuration

Seek Price Improvement

If checked, Smart routing will sweep certain exchanges for hidden liquidity at more favorable prices. This may result in slower executions.

Pre-Open Re-route

This allows you to route orders to major exchanges three minutes before the open. For orders submitted before the open, checking this box ensures your orders are routed prior to the open. This directive only applies to stocks listed on a major exchange, and cannot be used if the Ignore Opening Auction order attribute is set.

SMART Stock Routing Algorithms

Do not route to dark pools - For stock and warrant orders only. When checked, all dark pool destinations will be bypassed by the Smartrouter.

Customers who have the unbundled "Cost Plus" commission structure for stocks have the ability to choose from a list of Smart routing strategies for non-marketable stock orders to complement their trading strategy.

Use the checklist to select a single "Default" strategy which will automatically be applied to any non-marketable, Smart routed stock order, and any number of "Display" strategies, each of which will be available from the Destination field as a per-order selection.

Available strategies include:

  • SMART Multipurpose (SMART) - This is the basic smart-routing algorithm. Routes your non-marketable order to the default exchange for the instrument.
  • SMART Dark Only - Will probe the dark pools for liquidity and use the immediate-or-cancel time in force.

SMART Option Routing Algorithms

Choose how to route a smart-routed, non-marketable options order.

  • SMART Multipurpose (SMART) - This is the basic smart-routing algorithm. Routes your non-marketable order to the default exchange for the instrument .
  • SMART Maximize Rebate (SMART MaxRebate) - Routes the order to the exchange offering the highest rebate.
  • SMART Prefer Rebate (SMART PreferRebate) - Routes the order with the bias toward getting a rebate vs. getting the order filled.
  • SMART Prefer Fill (SMART PreferFill) - Routes the order with the bias toward getting a fill vs. getting a rebate.
  • SMART Maximize Fill (SMART MaxFill) - Routes the order with the sole objective of getting a fill.