Order Routing: How Your Stock Trades Actually Get Executed

How to see where your orders go

You do not have to guess. Two disclosure tools exist:

• Quarterly Rule 606(a) reports. Every broker-dealer that routes customer orders must publish a quarterly report identifying the venues it sent non-directed orders to, the percentages by order type, and the material terms of its payment arrangements. Brokers post these on their websites, usually in a legal or disclosures section, and FINRA Rule 6151 requires firms to submit them to FINRA for centralized publication on FINRA's site.
• Per-customer requests under Rule 606(b). You can ask your broker where your own orders were routed for the past six months, including venue and time details for each order.

Alongside routing reports, market centers publish execution-quality statistics under Rule 605 of Regulation NMS, covering measures like effective spreads. Reading a 606 report next to venue 605 data gives a fuller picture of what a broker's routing actually delivers.

Directed vs non-directed orders

By default, most retail orders are non-directed: the broker chooses the venue. Per FINRA's investor guidance, many firms let you direct an order to a specific exchange instead. The tradeoff is that a directed order makes you responsible for that venue choice, and you may miss a better price available elsewhere. For most long-term investors, non-directed routing under the best-execution duty is the practical default; directed orders are mainly a tool for active traders with a specific reason.

What to know before deciding

Routing quality is one input when choosing or evaluating a broker, not the only one. Before weighing it, check four things: whether the broker publishes clear 606 reports and where; whether it reports price-improvement statistics; how it describes its PFOF arrangements; and whether your typical order type (small market orders vs large limit orders) is the kind its routing handles well. Execution differences are usually measured in fractions of a cent per share, which matters more the larger and more frequent your trades are.

Decision framework: how much should routing matter to you?

1. Estimate your trading volume. A few small trades a year make routing differences economically tiny. Frequent or large trades amplify them.
2. Read your broker's latest 606 report. Note the top venues and whether PFOF is disclosed for them.
3. Look for execution-quality claims you can verify. Price-improvement statistics and average execution speed are the useful ones.
4. Compare against one alternative broker. Same measures, same order types, so the comparison is fair.
5. Re-check annually. Routing arrangements change, and so do the reports.

A common mistake is assuming all brokers route identically because commissions are all zero. The commission line converged; the routing behind it did not.

Conclusion and next steps

Order routing is the hidden machinery between your order ticket and your fill: brokers choose among exchanges, wholesalers, and ATSs, constrained by the best-execution duty of FINRA Rule 5310 and made visible through SEC Rule 606 disclosures. Understanding it turns execution quality from a mystery into something you can actually check.

Next steps: pull up your broker's most recent quarterly 606 report, identify its top three venues, and note the disclosed payment arrangements. Then request your own order-routing data if you trade often. To build the surrounding market-structure basics at a beginner-friendly pace, Finelo offers structured lessons on how markets and orders work.