3

Step 3Order Routing

We have treated order routing primarily as the activities of a sales trader operating on behalf of a buy-side customer. However, we have labeled this step “order routing” instead of “sales trading” because the order from the buy side can be handled in either of two ways (see Figure 4.3). The order can be handed off to the sales trader who acts in many ways as if the buy-side trading function has been outsourced.

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Figure 4.3 Step 3: Order routing employs applications, market data, and networks to place orders in trading venues with the best potential for an attractive execution.

Alternatively, we have noted the potential for ...

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