Order Routing

In arranging for the execution of Non-Directed Orders for equities and listed options, Schwab seeks out industry-leading execution services and access to the best-performing markets.  Schwab routes orders for execution to unaffiliated broker-dealers, who may act as market maker or manage execution of the orders in other market venues and also routes orders directly to major exchanges. 

Schwab considers a number of factors in evaluating execution quality among markets and firms, including execution price and opportunities for price improvement, market depth and order size, the trading characteristics of the security, speed and accuracy of executions, the availability of efficient and reliable order handling systems, liquidity and automatic execution guarantees, the likelihood of execution when limit orders become marketable, and service levels and the cost of executing orders at a particular market or firm. Price improvement occurs when an order is executed at a price more favorable than the displayed national best bid or offer. Schwab regularly monitors the execution quality obtained to ensure orders are routed to market venues that have provided high-quality executions over time. 

Schwab receives remuneration, such as liquidity or order flow rebates, from market venues to which orders are routed, and also pays fees for execution of certain orders. Quarterly information regarding the market venues to which we route orders and remuneration we receive is provided below. Information regarding the routing destination and time of execution of your orders for up to a six-month period is also available.

Report on Routing Customer Orders for Quarter Ending December 31, 2019

The report is divided into four sections:


Securities Listed on the NYSE/Network A Eligible Securities
Securities Listed on the NYSE Amex or Regional Exchanges and Reported as a Network B Eligible Security
Securities Listed on the NASDAQ Stock Market ("NASDAQ")
Exchange-Listed Options

For each section, this report identifies the principal venues to which Schwab routes non-directed orders, sets forth the percentage of various types of orders routed to each of the venues, and discusses the material aspects of any arrangements Schwab may have with these venues.

I. Securities Listed on the NYSE/Network A Eligible Securities

 Summary Statistics NYSE
Non-directed orders as percentage (%) of total customer orders:  99.7%
1. Market Orders as % of total non-directed orders 52.9%
2. Limit Orders as % of total non-directed orders 41.5%
3. Other Orders as % of total non-directed orders 5.6%

Venues Receiving Significant % of Total Non-Directed Orders

% of Non-Directed Order Flow Received   Order Composition as a % of Total Non-Directed Order Type  Order Composition as a % of Total Non-Directed Order Type  Order Composition as a % of Total Non-Directed Order Type 
NON DIRECT  MARKET ORDERS  LIMIT ORDERS  OTHER ORDERS 
Venues
Citadel Execution Services 31.9%  33.0%  29.2%  41.5% 
VIRTU  29.5%  30.9%  28.5%  24.2% 
G1X  21.2%  20.2%  22.7%  19.7% 
UBS Securities LLC  15.2%  14.9%  15.9% 12.9% 
Two Sigma  1.2%  1.1%  1.3% 1.0% 
Cboe EDGX  0.5%  0.0%  1.1% 0.3% 
NASDAQ  0.6%  0.0%  1.3%  0.3%

II. Securities Listed on the NYSE ARCA or Regional Exchanges/Network B Eligible Securities

Summary Statistics NYSE Amex/Regionals 
Non-directed orders as percentage (%) of total customer orders:  99.9% 
1. Market Orders as % of total non-directed orders  65.3% 
2. Limit Orders as % of total non-directed orders  31.0% 
3. Other Orders as % of total non-directed orders  3.7% 

Table

% of Non-Directed Order Flow Received   Order Composition as a % of Total Non-Directed Order Type  Order Composition as a % of Total Non-Directed Order Type  Order Composition as a % of Total Non-Directed Order Type 
Venues  NON DIRECT  MARKET ORDERS  LIMIT ORDERS OTHER ORDERS 
Citadel Execution Services  31.0%  31.8%  29.3%   30.9% 
VIRTU  29.4%  29.5% 29.3%   28.4% 
G1X  22.4% 22.4%  22.2%  23.6% 
UBS Securities LLC  15.3%  15.6% 15.6%   15.3% 
Two Sigma  1.2%  1.3% 1.3%  1.4% 
Cboe EDGX  0.4%  0.0%  1.1%  0.2% 
NASDAQ  0.4%  0.0%  1.3%  0.2% 

III. Securities Listed on the NASDAQ Stock Market

 Summary Statistics NASDAQ
Non-directed orders as percentage (%) of total customer orders:  99.9%
1. Market Orders as % of total non-directed orders  46.4% 
2. Limit Orders as % of total non-directed orders  46.8% 
3. Other Orders as % of total non-directed orders  6.8% 

table

% of Non-Directed Order Flow Received   Order Composition as a % of Total Non-Directed Order Type  Order Composition as a % of Total Non-Directed Order Type  Order Composition as a % of Total Non-Directed Order Type 
Venues NON DIRECT  MARKET ORDERS  LIMIT ORDERS  OTHER ORDERS 
Citadel Execution Services  31.1%  32.3%  29.3% 36.2% 
VIRTU  29.4%  29.9%   29.4%  26.4%
G1X  21.8%  21.7%  22.1%  21.4%
UBS Securities LLC  15.2%  15.0% 15.5%  14.2% 
Two Sigma  1.2%  1.2%  1.3% 1.2% 
Cboe EDGX  0.6%  0.0%  1.2%  0.3% 
NASDAQ  0.7%  0.0%  1.4%  0.4% 

IV. Exchange-Listed Options

Summary Statistics  Listed Options 
Non-directed orders as percentage (%) of total customer orders:  100% 
1. Market Orders as % of total non-directed orders  15.0% 
2. Limit Orders as % of total non-directed orders  83.4% 
3. Other Orders as % of total non-directed orders  1.6% 

Table

% of Non-Directed Order Flow Received   Order Composition as a % of Total Non-Directed Order Type  Order Composition as a % of Total Non-Directed Order Type  Order Composition as a % of Total Non-Directed Order Type 
Venues NON DIRECT  MARKET ORDERS  LIMIT ORDERS  OTHER ORDERS 
Cboe Exchange 20.3% 30.2%  18.1% 42.1%
Nasdaq PHLX  14.8% 19.3% 13.6% 34.6%
Cboe BZX 11.5% 3.0% 13.2% 2.1%
Nasdaq GEMX  9.3%   2.7%  10.6% 2.3%
MIAX 8.5% 15.0% 7.4% 5.8%
Nasdaq 8.1%    2.1% 9.3% 1.8%
Nasdaq ISE   7.4%  2.8% 8.3%  2.0%
NYSE Arca  5.5%  2.7%  6.1%  1.1%
MIAX Pearl  4.6% 3.0% 5.0% 2.3%
NYSE American  3.9% 4.6% 3.8% 1.5%
BOX Exchange 1.8%   6.1% 1.0%   0.8%
Cboe EDGX 1.6% 2.9%  1.4% 0.9%
Cboe C2 Exchange 1.3% 2.2% 1.2% 1.3%
MIAX EMLD  0.7% 0.9%  0.7%  0.5%
Cboe C1 Exchange 0.5% 1.9% 0.3% 0.0%
Nasdaq BX 0.2% 0.5%  0.1%  0.7%
Nasdaq MRX  0.1% 0.2% 0.1% 0.1%