How Your Buy and Sell Orders Get Filled
by Chris Nagy and Charles Rotblut, CFA
Christopher “Chris” Nagy is the managing director of order routing, sales and strategy at TD Ameritrade.
I spoke to him recently about the process that occurs at the brokerage firm after an investor places a stock trade.
Charles Rotblut, CFA
Charles Rotblut (CR): Let’s start with the basics. An investor logs on to TD Ameritrade’s website to place a stock order, and they click “Buy” or they click “Sell.” What happens from that point to the time they see the trade confirmation on their screen?
Chris Nagy (CN): Most investors, and in fact a lot of people in the financial markets, believe that stocks either trade on the New York Stock Exchange or the NASDAQ Stock Market. The reality is far different from that fiction. Today there are over 40 different dark places—or 40 different execution venues—in the marketplace where trades can and do occur, and prices between those venues are changing very quickly.
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Charles Rotblut, CFA is a vice president at AAII and editor of the AAII Journal. Follow him on Twitter at twitter.com/charlesrotblut.