Scottrade Best-Execution Index (SBI)*
A Cornerstone of Execution Quality
As part of Scottrade's regular and rigorous review of execution quality, and in order to offer a quality execution, we developed a patented algorithm – the Scottrade Best-Execution Index (SBI). The SBI evaluates execution quality on a stock-by-stock basis over a period of time**.
What is the SBI?
The SBI produces an index value that is used to compare the execution quality of market centers utilized by Scottrade to other market centers. The SBI is an analytical tool used to identify under-performing market centers, not to identify the best execution experience possible.
The SBI incorporates the following equally weighted components:
- Speed of execution
- Price improvement (percentage of orders improved and average improvement per share)
- At the quote or better percentage
- Outside the quote (percentage of orders disimproved and average disimprovement per share)
- Effective spread
Scottrade does not guarantee any trade’s execution time or price. However, if the SBI process identifies an under-performing market center, Scottrade will seek opportunities to route affected order flow to a better-performing market center, attempting to offer you the best execution possible.
*The Scottrade Best-Execution Index is a patented algorithm (Patent No. 7,698,200) for evaluating execution quality in NASDAQ 100 and S&P 500 stocks. The SBI is utilized by Scottrade to compare the execution quality of market centers utilized by Scottrade to other market centers.
**The SBI analyzes NASDAQ 100 and S&P 500 stocks from previous months.
Information is based on analysis from VistaOne Solutions. VistaOne Solutions is not affiliated with Scottrade. The information does not include pre-market or after-hours orders or orders received during locked or crossed markets. It does include markets received during fast market conditions. Scottrade updates the information on a monthly basis.
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 Scottrade does not receive a timely execution report from a trading center.
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 VistaOne Solutions and by reviewing the output of our patented algorithm, the Scottrade Best-Execution Index or SBI™.
* defined in SEC rule 605