Smart Order Routing
Automated logic that scans multiple trading venues to find the best price, fee, and fill quality for each order.
Smart Order Routing (SOR) is the technology that splits and routes orders across exchanges, ECNs, and dark pools in real time to achieve the best overall execution. It accounts for:
- Price — finding the best bid or offer across venues.
- Fee — maker/taker rates differ by exchange.
- Speed — latency to each venue.
- Fill probability — depth of book at each venue.
Broker-dealers owe a best-execution duty under FINRA Rule 5310 (and their agency obligation), while Reg NMS Rule 611 (the Order Protection Rule) separately bars trading through a better-priced protected quote on another venue — SOR is how brokers operationalize both. Retail traders generally cannot inspect how their broker's SOR behaves, making broker selection a meaningful execution-quality decision.