Trade Execution Quality & Routing
Schwab regularly monitors execution to ensure orders are routed to markets and firms that consistently provide high-quality executions for client orders.
Described below are several factors affecting how fast an order is filled in its entirety and at what price. While no one statistical measure can capture execution quality, we provide performance data on certain of these factors for some perspective on the trading process.
The Effective-to-Quoted Spread Ratio is a measure of the execution price of an order relative to the quoted spread. Intended to reflect the roundtrip cost of the purchase and sale of a stock, the ratio is calculated as twice the difference between the execution price and the midpoint of the national best bid and offer (NBBO), divided by the NBBO. When a buy order is executed at a price equal to the offer price or a sell order executed at a price equal to the bid price the effective/quoted ratio is 100%. Lower ratios indicate executions better than the NBBO and greater cost savings (i.e., price improvement) to clients.
|LISTED S&P 500||NASDAQ|
|Quarter||Industry Average||Schwab||Industry Average||Schwab|
Table data for Charles Schwab is calculated pursuant to SEC Rule 605 and derived from S3, third-party vendors that are not affiliated with Charles Schwab. The Effective/Quoted Table data is derived from market orders for at least 100 shares and up to 1999 shares for Listed S&P 500 and NDX 100 covered securities. Statistics displayed represent market orders with shares sizes between 100 to 1999 shares, excluding pre-opening orders, orders received during locked, crossed, or fast markets, and destination outages.
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Information about third-party ratings
StockBrokers.com: 2016 Online Broker Review," published February 16, 2016. Participation in the review is voluntary; a total of 13 online brokers submitted themselves for ranking for the 2016 review. The Online Broker Review assesses participating online brokers on 295 variables across 10 categories: Commissions & Fees, Offering of Investments, Platforms & Tools, Research, Customer Service, Mobile Trading, Ease-of-Use, Education, Order Execution, and Banking. All categories, with the exception of Banking," are factored in to the overall ranking. Star ratings are out of five possible stars and are based on a calculation that combines the variable assessment with an opinion score from 1-10 with 10 very good" in StockBrokers.com's opinion. Best in Class are online brokers who have placed within the Top 5 for a category. Industry Awards are awarded based on the opinions of StockBrokers.com. Read our 2016 Online Broker Review. For further information on how the ratings were calculated, see StockBrokers.com's "How We Test".