Scottrade Trade Quality and Execution

Trading Execution

Scottrade monitors the execution quality of all the trading centers to assess whether the trading center is providing our customers best execution. Scottrade uses various monitoring methods. These methods include a daily order-by-order exception report analysis. They also include a post trade date regular and rigorous review of execution quality. We perform this regular and rigorous review by analyzing statistics from Thomson Transaction Analytics and by reviewing the output of our proprietary patent-pending algorithm, the Scottrade Best Execution Index or SBI�.

* defined in SEC rule 605

Best Execution Index

As part of Scottrade's regular and rigorous review of execution quality, we developed a proprietary algorithm, the Scottrade Best-Execution Index (SBI), for evaluating execution quality on a stock-by-stock basis over a period of time. The SBI is an index value that is used to compare the execution quality of market centers utilized by Scottrade to other market centers. The SBI is intended to be an analytical tool for identifying underperforming market centers, not for identifying the best execution quality or guaranteeing an execution's time or price.

The SBI is composed of the following equally weighted components:

Speed of Execution
Price improvement percentage and cent improvement
At the quote or better percentage
Outside the quote percentage or cent disimprovement
Effective spread

If a market center is under-performing, Scottrade will seek opportunities to route orders in those securities to a better performing market center.

The Scottrade Best Execution Index is a proprietary algorithm for evaluating execution quality on a stock-by-stock basis. The SBI is utilized by Scottrade to compare the execution quality of market centers utilized by Scottrade to other market centers in order to seek opportunities for better performing market centers. The SBI is intended to be an analytical tool for identifying underperforming market centers, not for identifying the best execution quality. The SBI does not imply or guarantee superior execution quality or an execution's time or price.

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Brokerage Products and Services offered by Scottrade, Inc. – Member FINRA and SIPC.

No information on this web site should be considered a recommendation or solicitation to invest in a particular security or type of security.

Investors should consider the investment objectives, risks, and charges and expenses of a mutual fund carefully before investing. A mutual fund's prospectus contains this and other information about the mutual fund. Prospectuses are available through our trading site or through a Scottrade branch office. The prospectus should be read carefully before investing.

Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Scottrade's margin agreement is available on our web site and at our branch offices; and contains the Margin Disclosure Statement and information on our lending policies, interest charges, and the risks associated with margin accounts. Options are not appropriate for all investors. Detailed information on our policies and the risks associated with options can be found in Scottrade's Options Application and Agreement, Brokerage Account Agreement, and Characteristics and Risks of Standardized Options (available from your local branch office or here). All option accounts require prior approval by Scottrade.

Market volatility, volume, and system availability may impact account access and trade execution.

Testimonials may not be representative of the experience of other clients and are no guarantee of future performance or success.