Smart order routing

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Smart order routing (SOR) is an automated process of handling orders, aimed at taking the best available opportunity throughout a range of different trading venues.^[1][2]

The increasing number of various trading venues and MTFs has led to a surge in liquidity fragmentation, when the same stock is traded on several different venues, so the price and the amount of stock can vary between them. SOR serves to tackle liquidity fragmentation, or even benefit from it. Smart Order Routing is performed by Smart Order Routers - systems designed to analyze the state of venues and to place orders the best available way, relying on the defined rules, configurations and algorithms.