Step 1: Order

Client (or Schwab representative) enters equity order.

Step 2: Routing

Before sending your order, Schwab’s advanced order router reviews specific criteria such as order type, size, and potential market impact. Orders are then primarily routed in one of two ways, depending on whether the order is “marketable” (i.e. eligible for immediate execution).

Orders Priced for Immediate Execution

Marketable Limit Orders

Orders to buy (or sell) in which the limit price is at or above (or below) the current market.

Market Orders

An order to buy or sell a security at the current price available in the market.

Oversized Orders3

Orders of 10,000 shares (or greater) or for a market value of at least $200,000.

Liquidity Providers

Liquidity providers work to improve executions relative to the National Best Bid or Offer (NBBO) by using capital to execute orders against their own account or by routing to Alternative Trading Systems (ATS), securities exchanges, or other market markers.

Securities Exchange

A securities exchange, an entity that has registered with the SEC, is a marketplace that facilitates the buying and selling of securities among market participants.


Alternative Trading System

An Alternative Trading System (ATS) is an execution platform that brings together buyers and sellers of securities, similar to how orders are matched on an exchange.

Step 4A: Execution

Most orders are executed instantly. Larger orders may be marked for special handling to potentially minimize market impact and obtain a better price.

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