Important Documents & Information
Execution Quality & Order Routing
TradeStation Securities, Inc. (“TradeStation”) is obligated to obtain best execution of your orders, so we exercise reasonable care to obtain the most advantageous terms for every order. TradeStation considers several factors in evaluating execution quality among markets makers and exchanges, including execution price and opportunities for price improvement. Price improvement occurs when an order is executed at a price more favorable than the displayed national best bid or offer. TradeStation also evaluates speed and accuracy of executions, the availability of efficient and reliable order handling systems, the likelihood of execution when limit orders become marketable, and service levels when determining where an order will be routed. TradeStation regularly and rigorously monitors the execution quality obtained to ensure orders are routed to market venues that have provided high-quality executions over time.
TradeStation 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 routes orders directly to major exchanges. TradeStation makes regular adjustments to order routing based on data from an industry-leading execution services provider.*
TradeStation receives rebates from market venues to which orders are routed and pays fees for execution of certain orders. TradeStation does not base its routing decisions on the size of a rebate, since all market makers, to which orders are routed, must agree to pay the same per-share or per-contract rate. Quarterly information regarding the market venues to which we route orders and any order routing inducements we receive, including payment for order flow, is provided below.
* S3 Financial, LLC
SEC Rule 607 Disclosure
Securities and Exchange Commission Rule 607 requires all registered broker-dealers to provide disclosures to customers of payment for order flow practices upon the opening of a new account and annually thereafter. TradeStation sends certain equity orders to exchanges, electronic communication networks, or broker-dealers during normal business hours and during extended trading sessions. Some of those market centers provide payments to TradeStation, or charge access fees depending upon the characteristics of the order and any subsequent execution. Further details of these payments and fees are available upon written request. TradeStation receives compensation from routing orders in exchange-listed options to broker-dealer intermediaries, which in turn use intelligent order routing technology to seek the best execution available in the market. Compensation is generally in the form of per/share or per-option contract cash payment. TradeStation utilizes unaffiliated broker-dealers to perform order routing services for direct routed options orders. The unaffiliated broker-dealers act solely as a passthrough to facilitate direct routed options orders and do not interact with any such orders.