The stock market is all about buying and selling shares at right prices. Smart order-routing can help you to discover the best price available on the two major bourses - the Bombay Stock Exchange and the National Stock Exchange.
Smart order-routing involves an automatic system-driven flow of orders to bourses, where a trade will get executed most efficiently.
"It is expected to give more efficient order execution for an investor. The system constantly receives market data from all the exchanges, it compares the market conditions at both the exchanges and based on factors such as price, cost and liquidity, it automatically forwards order to the exchange where best execution is likely to happen. We are considering to opt for this system," says Nalin Pant, vice-president, Elara Capital.
According to market experts, smart order routing will be beneficial when the order placed is for a large quantity. Therefore, it will mostly be used by high net worth individuals (HNIs) and institutional investors.
"The system will not be useful for intra-day and futures and options trades as it will route orders to two or more exchanges for the best price. It will slice the order as per the best quantity and send the orders to the bourses. Brokerage house should ideally not charge any fees for this service. It is likely to be a value-added service for HNI clients," says Vinay Agrawal executive director, equities, Angel Broking.
