Edit SmartRouting Directives

You can define event-specific directives for contracts routed through IB SmartRouting, specifically excluding exchanges and setting a price cap by defining the acceptable distance from the NBBO.

To modify SmartRouting functionality

1. On the Configure menu select Global Configuration.

2. Click Smart Routing in the left pane.

3. Use the right panel to set these parameters:

Excluded Exchanges

Use this area to direct SmartRouting NOT to route to a specific exchange for a specific contract. Enter the underlying and select the security type. Valid exchanges that may be excluded are available in the Exchange drop down list.

Excluded Quotes

• Exclude exchanges with non-firm quotes - if the available quantity is over 100, the quote is considered firm.

• Exclude exchanges whose quotes are not automatically executable.  If this option is selected, IB will use its best efforts to determine which exchanges’ quotes are immediately automatically executable, and which exchanges’ quotes would require manual (human) handling, and IB will route only to those exchanges offering automatic execution.  Please note that while IB will use its best efforts, it is not always possible to determine whether a quote is automatically executable..

• Define the NBBO price cap by entering the "maximum allowable distance from NBBO." Note that NBBO price capping supersedes the exclusion of non-firm quotes, i.e. your order will be routed to a non-firm quote within the price cap over a firm quote outside the price cap.

Pre-Open Re-route

This allows you to route orders to major exchanges three minutes before the open. For orders submitted before the open, checking this box ensures your orders are routed prior to the open. This directive only applies to stocks listed on a major exchange.

IMPORTANT NOTE:  If you choose to: 1) exclude quotes from certain exchanges; 2) exclude non-firm quotes; or 3) exclude exchanges whose quotes are not automatically executable, your order may not be executed at the best posted price nationally (the “NBBO”).  This is because one of the exchanges that you chose to exclude might have the best posted price but that exchange will be bypassed by the IB SmartRouting system on your instruction.

In addition, if you exclude certain exchanges from the eligible SmartRouting destinations and your order is routed to another exchange with an inferior posted price, your order may not be executed by the exchange to which it is sent because that exchange or ECN may not be willing to execute at an inferior price, or your order may not be marketable at that exchange.  You should carefully evaluate all of these factors before deciding whether to exclude certain exchanges from the eligible IB SmartRouting destinations.

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