What You See Is Not What You Get: The Challenge of Truly "Smart" Order Routing


This paper lifts the lid on the real challenges firms face in achieving truly 'smart' order routing in today's ever-changing multi-market landscape and asserts that the SOR can add real value to the execution service for those that can understand the reliability of the data available and analyse market trends and microstructure.



In the world of equities, the multi-market landscape is well established. It goes without saying that before any order is sent to a market, the trader - whether human or algo - looks across all available pools of liquidity and decides on the optimum venue of execution.

This decision used to be simple - which venue has the best price or which has the most volume? But as markets evolve, we can no longer rely solely on visible information to make these decisions.

In the first paper of this series, Shifting Sands - the harsh realities of executing in today's markets, Will Winzor-Saile explored the issues around constructing a reliable, globally-consistent market access infrastructure, and looked at how the more enlightened brokers are starting to fundamentally rethink their approach to electronic execution.

Here, he focuses on a fundamental part of this, the smart order router (SOR), and the challenges facing firms as they struggle to stay on top of the ever-changing market landscape. 

This paper lifts the lid on the real challenges firms face in achieving truly 'smart' order routing in today's ever-changing multi-market landscape and asserts that the SOR can add real value to the execution service for those that can understand the reliability of the data available and analyse market trends and microstructure.

New technology, new regulation, new challenges: making money in today's financial markets is all about staying ahead of the curve. Having the capability to spot new trends and act fast turns change into opportunity. That's why 85% of the world's premier financial institutions trust Fidessa to provide them with their multi-asset trading and investment infrastructure, their market data and analysis, and their decision making and workflow technology.