Orders & execution
How do smart order routers (SORs) fragment equity trades across fragmented venues?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
Smart order routers (SORs) are broker algorithms that split and send orders across multiple exchanges and dark pools to seek the best available price and minimize market impact from fragmented liquidity.
How it works
Because U.S. equities trade across more than a dozen exchanges and numerous dark pools, SORs continuously scan venues to achieve best execution requirements while balancing speed, fees, and price improvement.
An example
A large buy order is split by an SOR into smaller pieces routed simultaneously to three exchanges and a dark pool to avoid moving the visible price on any single venue.
Risk & limitations
Order routing logic varies by broker and can be influenced by rebate arrangements, so execution quality isn't uniform across all brokerage platforms.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.