Trade Quality & Execution

Scottrade takes great pride in seeking best execution for its clients’ equity and option orders, and we recognize the importance of delivering quick and efficient executions. That’s why we thoroughly review key execution metrics including price improvement percentage, execution price and execution speed on a daily basis.

 

We maintain a healthy dialogue with our market centers, blending concise analysis with effective communication in an effort to drive competition that benefits our clients in the form of more competitive execution prices versus the National Best Bid/Offer (NBBO). This focus on driving competition for both equity and option trades yields millions of dollars in price improvement each year – real savings that are passed on to our clients. Learn more about Scottrade’s performance in key execution quality metrics and our tools for monitoring execution quality below.

 

Learn more about the market centers to which Scottrade routes its order flow:

 

 

 

                                  

Life Cycle of an Order

Savings Per Order

Savings per order represents real cost savings provided to Scottrade clients.

 

This metric captures both the frequency and amount of price improvement received on an order basis. It is calculated using the following formula:

Savings Per Order formula



 

Execution quality statistics are generated from RegOne Solutions, a third-party data provider. Equity statistics are based on trade activity in two symbol groups: S&P 500 securities and other exchange-listed securities. The above data reflects performance in the respective symbol groups and share/contract sizes during the most recent 6-month period. Statistics exclude trades entered outside of regular trading hours, orders received during locked or crossed markets and trades that, in Scottrade's discretion, occur in unique market conditions or other unique circumstances. Market volatility, volume and system availability may impact trade execution quality.

Scottrade monitors execution quality in an effort to seek best execution* for its customers. Scottrade analyzes key execution quality metrics across various bucket sizes and time horizons when reviewing destination performance. Destinations are compared against one another as well as against Industry benchmarks. Scottrade also employs a daily order-by-order exception analysis in an effort to ensure a consistent, quality execution experience for its clients.

*Per FINRA Rule 5310 

Price Improvement Percentage

We strive to deliver executions for equity orders at prices better than the National Best Bid/Offer (NBBO). This effort is captured by our performance in price improvement percentage – a measure of the percentage of shares executed at a price better than the NBBO.

 

Similarly, we aim to deliver competitive executions for option orders. This effort is also evidenced by our performance in price improvement percentage – a measure of the percentage of contracts executed at a price better than the prevailing market.

 

Price improvement reflects real savings passed on to you and underscores our commitment to providing a consistent, quality execution experience.

Execution quality statistics are generated from RegOne Solutions, a third-party data provider. Equity statistics are based on trade activity in two symbol groups: S&P 500 securities and other exchange-listed securities. Option statistics are based on trade activity in listed options. The above data reflects performance in the respective symbol groups and share/contract sizes during the most recent 6-month period. Statistics exclude trades entered outside of regular trading hours, orders received during locked or crossed markets and trades that, in Scottrade's discretion, occur in unique market conditions or other unique circumstances. Market volatility, volume and system availability may impact trade execution quality.

Scottrade monitors execution quality in an effort to seek best execution* for its customers. Scottrade analyzes key execution quality metrics across various bucket sizes and time horizons when reviewing destination performance. Destinations are compared against one another as well as against Industry benchmarks. Scottrade also employs a daily order-by-order exception analysis in an effort to ensure a consistent, quality execution experience for its clients.

*Per FINRA Rule 5310

 

Execution Price (“At-or-Better Percentage”)

While many Scottrade clients enjoy some form of price improvement on their equity and option orders, we closely monitor each execution to ensure you do not receive an execution price that represents a disadvantage versus the prevailing market.

 

Scottrade validates this through at-or-better percentage – equal to the percentage of shares executed at a price better than the NBBO plus the percentage of shares executed at the NBBO. For options, this metric is equal to the percentage of contracts executed at a price better than the prevailing market, plus the percentage of contracts executed at the prevailing market.

Execution quality statistics are generated from RegOne Solutions, a third-party data provider. Equity statistics are based on trade activity in two symbol groups: S&P 500 securities and other exchange-listed securities. Option statistics are based on trade activity in listed options. The above data reflects performance in the respective symbol groups and share/contract sizes during the most recent 6-month period. Statistics exclude trades entered outside of regular trading hours, orders received during locked or crossed markets and trades that, in Scottrade's discretion, occur in unique market conditions or other unique circumstances. Market volatility, volume and system availability may impact trade execution quality.

Scottrade monitors execution quality in an effort to seek best execution* for its customers. Scottrade analyzes key execution quality metrics across various bucket sizes and time horizons when reviewing destination performance. Destinations are compared against one another as well as against Industry benchmarks. Scottrade also employs a daily order-by-order exception analysis in an effort to ensure a consistent, quality execution experience for its clients.

*Per FINRA Rule 5310

Fast, Efficient Executions

Trade execution speed, or how quickly an order is filled, is an important factor in evaluating execution quality. We regularly review and assess market center performance to optimize trade speed and strongly compete against industry averages – helping to ensure your orders are executed quickly and efficiently. 

 

How Fast? This Fast

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S E C O N D S

Trade execution speed data represents a 6-month rolling average for market orders (100-1999 Shares) in S&P 500 securities.

Trade execution statistics are provided by RegOne Solutions, which is not affiliated with Scottrade. Equity statistics are based on trade activity in two symbol groups: S&P 500 securities and other exchange-listed securities. Statistics exclude trades outside of the regular trading session, orders received during locked or crossed markets and trades that, in Scottrade's discretion, occur in extreme market conditions or other unique circumstances. Market volatility, volume, and system availability may impact trade execution quality.

Trade execution speed is measured from the time Scottrade routes your order to the marketplace until the time your order is executed at the trading center. Trade execution speed does not include the time it takes for the order to be reported back to Scottrade and you. You will always receive the price at which your order was executed at the trading center even though the execution report that Scottrade receives may be delayed (or “late”) from the trading center. A “late report” refers to when a timely execution is not received from a trading center.

Scottrade monitors execution quality in an effort to seek best execution* for its customers. Scottrade analyzes key execution quality metrics across various bucket sizes and time horizons when reviewing destination performance. Destinations are compared against one another as well as against Industry benchmarks. Scottrade also employs a daily order-by-order exception analysis in an effort to ensure a consistent, quality execution experience for its clients.

*Per FINRA Rule 5310

 

Enhanced Liquidity

We provide you with a more seamless execution experience by routing your orders to market centers capable of providing enhanced liquidity. When you place an order that is larger than the publicly displayed size, our market centers’ ability to provide enhanced liquidity serves to minimize the order’s potential price impact to the market.

To better understand enhanced liquidity, consider the following example:

Enhanced Liquidity

Client A places a 500-share market buy order in symbol XYZ when the displayed size on the offer is only 200 shares. A market center’s ability to efficiently execute the remaining 300 shares of that order at the prevailing offer or better would be an effective gauge of that market center’s ability to provide enhanced liquidity. If this order had not been routed to a market center capable of providing enhanced liquidity, you could potentially receive two separate transactions: 200 shares priced at the offer ($20.04) with the remaining 300 shares filled at $20.05.


Our destination’s ability to provide enhanced liquidity to your order flow in these situations is a tangible benefit to your execution experience.

 

 

  Quarterly Order Routing Disclosure

Scottrade supports efforts to provide and promote transparency in the marketplace. We believe enhanced, meaningful transparency can serve as a catalyst for driving competition among industry participants to the ultimate benefit of the investing public. We recognize and embrace the opportunity to educate our clients on why this data is relevant and how the data can be used to empower a client’s decision-making process. Scottrade knows that a confident, educated investing public will only serve to benefit the current marketplace.

This report details Scottrade’s order routing decisions across four symbol groups:

  • New York Stock Exchange Listed (Tape A Securities)
  • NASDAQ Listed (Tape C Securities)
  • Regional Exchanges (Tape B Securities)
  • Exchange Listed Options
     

Pursuant to its obligations under the U.S. Securities and Exchange Commission’s disclosure rule, SEC Rule 606, Scottrade makes its order routing practices publicly available on a quarterly basis. This report identifies the venues to which Scottrade sent client order flow during the applicable period in addition to detailing any material relationships Scottrade maintains with those execution venues.

To review Scottrade’s Order Routing Information, compiled by quarter, please click the link below:
View Scottrade, Inc. SEC Rule 606 Report

Please note that disclosures regarding Scottrade, Inc.’s clearing arrangement with Interactive Brokers LLC (“IB”) can be found via the following links:
Interactive Brokers Order Routing Information
Interactive Brokers SEC Rule 606 Report

To learn more about Financial Information Forum (FIF) retail execution quality statistics, please click the link below:
Scottrade Retail Execution Quality Statistics