Trade Execution Quality
Fidelity is committed to obtaining the most favorable trade execution for our customers. We actively manage customer orders through Fidelity's proprietary order routing system, and monitor multiple execution quality criteria, including those described below.
| What Defines Execution Quality? | How it's measured? | Fidelity Statistics for Q4 2023 |
|---|---|---|
| What Defines Execution Quality? Price Improvement | How it's measured? Percentage of shares executed at prices better than the prevailing National Best Bid or Offer (NBBO), i.e., either below the best offer for buys or above the best bid for sells. | Fidelity Statistics for Q3 2023 95.47%
% of shares that are price improved: LEARN MORE |
| What Defines Execution Quality? Execution Price | How it's measured? Percentage of shares executed at or within the National Best Bid or Offer (NBBO), which is a consolidated quote representing the highest bid and lowest offer for a security across all exchanges and/or market makers. It is updated continuously during market hours. | Fidelity Statistics for Q3 2023 98.8% % of shares that fall within the NBBO: LEARN MORE |
| What Defines Execution Quality? Execution Speed | How it's measured? Average period between the time Fidelity receives an order and the time of order execution. | Fidelity Statistics for Q3 2023 0.05 of a second Average execution speed: LEARN MORE |
| What Defines Execution Quality? Effective Spread | How it's measured? The distance from the midpoint of the market at the time when your order is entered to the execution price you receive. This value is doubled to capture the whole bid/offer spread. This amount captures both how often, and by how much, a broker-dealer improves the price of a share. | Fidelity Statistics for Q3 2023 $.0035 Average effective spread: LEARN MORE |
Fidelity's Approach to Execution Quality
Fidelity has an internal order flow management team responsible for directing order flow to the market makers and market centers who provide the best overall execution. The order flow management team uses both internal and external technology to generate reports that identify any order that executes outside the National Best Bid or Offer (NBBO). To help ensure that our high standards are met, Fidelity's order flow management team has established policies and procedures to:
- Supervise order flow routing activities
- Define execution quality measures, which play a role in determining where orders are routed
- Monitor and evaluate competing market centers for order handling and execution quality
- Identify and qualify orders executed outside the NBBO
- Take corrective action for failure to meet Fidelity's execution quality standards
- Services are provided by Fidelity Capital Markets, which is a division of National Financial Services LLC (NFS). NFS is a Fidelity Investments company.
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