How are options routed at TD Ameritrade

[Ayn Rand]

1. Trade options - Only GS
2. Use TD Ameritrade
3. Think I have selected route for best price. I think there is like 5 different exchanges trade could go to

How does this work

Bid $1.00
Ask $1.25

I place bid for $1.10

Does my bid go to all the exchanges and sit in the book at $1.10 or does it wait until the bid is $1.10 at one of the exchanges and then go their.

If you want to show up on the book at any price do you have to pick a certain exchange?

Have any idea which exchange carries the most GS options?

 

[eastern_warrior]

They'll be routed to whoever is paying them the most for the flow.

https://www.tdameritrade.com/retail-en_us/resources/pdf/AMTD2054.pdf

Information concerning significant venues:
Cboe BZX Options – TD Ameritrade Clearing receives payment from Citadel Execution Services, Citi Global Markets, Dash Financial, Global Execution Brokers, Morgan Stanley, and Wolverine Execution Services for directing equity and index options order flow to this venue. Payments received averaged $0.51 per contract for order flow executed in the fourth quarter 2019.

Nasdaq PHLX – TD Ameritrade Clearing receives payment from Citadel Execution Services, Citi Global Markets, Dash Financial, Global Execution Brokers, Morgan Stanley, and Wolverine Execution Services for directing equity and index options order flow to this venue. Payments received averaged $0.51 per contract for order flow executed in the fourth quarter 2019.

NYSE Arca Options – TD Ameritrade Clearing receives payment from Citadel Execution Services, Citi Global Markets, Dash Financial, Global Execution Brokers, Morgan Stanley, and Wolverine Execution Services for directing equity and index options order flow to this venue. Payments received averaged $0.51 per contract for order flow executed in the fourth quarter 2019.

Cboe Options – TD Ameritrade Clearing receives payment from Citadel Execution Services, Citi Global Markets, Dash Financial, Global Execution Brokers, Morgan Stanley, and Wolverine Execution Services for directing equity and index options order flow to this venue. Payments received averaged $0.51 per contract for order flow executed in the fourth quarter 2019.

Nasdaq Options Market – TD Ameritrade Clearing receives payment from Citadel Execution Services, Citi Global Markets, Dash Financial, Global Execution Brokers, Morgan Stanley, and Wolverine Execution Services for directing equity and index options order flow to this venue. Payments received averaged $0.51 per contract for order flow executed in the fourth quarter 2019.

Cboe EDGX Options – TD Ameritrade Clearing receives payment from Citadel Execution Services, Citi Global Markets, Dash Financial, Global Execution Brokers, Morgan Stanley, and Wolverine Execution Services for directing equity and index options order flow to this venue. Payments received averaged $0.51 per contract for order flow executed in the fourth quarter 2019.

MIAX PEARL – TD Ameritrade Clearing receives payment from Citadel Execution Services, Citi Global Markets, Dash Financial, Global Execution Brokers, Morgan Stanley, and Wolverine Execution Services for directing equity and index options order flow to this venue. Payments received averaged $0.51 per contract for order flow executed in the fourth quarter 2019.

Nasdaq GEMX – TD Ameritrade Clearing receives payment from Citadel Execution Services, Citi Global Markets, Dash Financial, Global Execution Brokers, Morgan Stanley, and Wolverine Execution Services for directing equity and index options order flow to this venue. Payments received averaged $0.51 per contract for order flow executed in the fourth quarter 2019.

Nasdaq ISE – TD Ameritrade Clearing receives payment from Citadel Execution Services, Citi Global Markets, Dash Financial, Global Execution Brokers, Morgan Stanley, and Wolverine Execution Services for directing equity and index options order flow to this venue. Payments received averaged $0.51 per contract for order flow executed in the fourth quarter 2019.

Rule 606 exempts broker-dealers from identifying execution venues that received less than 5% of non-directed o

 

[FSU]

There are 16 different options exchanges. With TD/TOS you can route your order for GS options to 9 of these or select the Smart Route. Not sure if the Smart Route is designed to give you the best fill or if it takes into account rebates TD may get.

Either way your order will go to a specific exchange. Other exchange's Market Makers may or may not join your bid. The quote people see will now reflect your new bid. Even though you changed the bid, the option may still trade on another exchange at your price and you won't be filled.

Each exchange has different fees for adding or taking liquidity. So you are more likely to be filled on one exchange vs others.

Since TD sells their order flow, it will be looked at first by who the sold it to. If they feel it is a good trade the order may be crossed with them on an exchange.

I will personally route all my orders to the CBOE. I have found I will generally get the best fill here.