• Print
  • Default text size A
  • Larger text size A
  • Largest text size A

Commitment to Execution Quality

We constantly work to ensure that your order receives a quality execution price.

Fidelity's unique approach

#1 discount broker in order execution

New data confirms that Fidelity offers the most price improvement to individual investors.1
Read the Barron's article from 7/1/2015.

Barron's recognized Fidelity as number one in order execution among discount brokers.2
Read the Barron's article (PDF) from 3/2/2015.

Our intelligent order handling system routes your order to competing market centers to seek out price improvement opportunities and our Order Flow Management Team monitors execution prices to confirm they meet our high standards. Combined with our 1-Second Execution Guarantee, there are many reasons why your next trade should be at Fidelity.

Performance and value

Price improvement
We are one of the industry leaders in average dollar value of price improvement, a process that can save you money on each order.

Execution insight
We're proud to be the only firm to share order-level price improvement3; clearly shown on both your Order Status and Trading Profile.

See a sample Order Status and Trading Profile.

1-Second Execution Guarantee
We ensure that qualifying market orders4 are executed at the NBBO in 1 second or less, or they are commission-free.

Order flow management
Our Order Flow Management Team ensures that your order goes to the top-performing market centers, seeking the best execution price.

What defines execution quality?

Percentage of shares that are price-improved: 84.4%

Q1 2015

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 Q4 2014 and Q1 2015 Statistics on Price Improvement

Month Overall listed Overall NASDAQ
March 2015 85.7% 82.0%
February 2015 85.6% 81.5%
January 2015 85.7% 81.9%
December 2014 85.8% 81.9%
November 2014 85.9% 82.9%
October 2014 84.4% 81.1%

Percentage of shares that fall within the NBBO: 95.8%

Q1 2015

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 Q4 2014 and Q1 2015 Statistics on Execution Price

Month Overall listed Overall NASDAQ
March 2015 96.6% 94.0%
February 2015 96.5% 95.1%
January  2015 95.7% 95.1%
December 2014 96.2% 94.3%
November 2014 96.3% 95.2%
October 2014 95.0% 93.6%

Average execution speed: 0.12 of a second

Q1 2015

How it's measured: Average period between the time Fidelity receives an order and the time of order execution.

NFS NASDAQ

Execution speed: percentage of shares
Q1 2015


National Financial Services (NFS) is an affiliated broker-dealer of Fidelity Brokerage Services.

NFS Listed

Execution speed: percentage of shares
Q1 2015

 execution_speed_t2
National Financial Services (NFS) is an affiliated broker-dealer of Fidelity Brokerage Services.

Average effective spread: $0.0106

Q1 2015

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.

Overall NASDAQ

Overall Listed


Example: A stock is quoted with a bid of $10.00 and an ask of $10.04 at the time your order is entered. The quoted spread is $0.04. The midpoint price is $10.02 and your buy order is executed at $10.03. The difference between the midpoint ($10.02) and your execution price ($10.03) is $0.01. This value is doubled, so the effective spread on your order is $0.02. The lower the effective spread value, the better. Effective spread calculates how much above the midpoint price you paid on a buy order and how much below the midpoint price you received on a sell order.


Financial Information Forum (FIF) industry comparison

In order to provide investors with a more consistent way of comparing order execution statistics across the financial industry, we are proud to display our execution statistics as a member of the Financial Information Forum (FIF). FIF—a voluntary financial industry group composed of member firms such as broker-dealers, exchanges, and vendors—serves as a central resource for objective commentary and analysis on industry initiatives and informs regulators about the impact of proposed regulation and other market structure changes.

As part of the FIF Rule 605/606 working group, we have volunteered to provide a standard set of quarterly execution statistics so that you can easily compare execution quality across firms. Current firms participating in the working group are Fidelity, Charles Schwab and Scottrade. All discount brokerage firms were asked by the FIF to participate in this working group, but others chose not to.

View RegOne's latest FIF Rule 605/606 Working Group report (PDF).

SEC Rule 605

The SEC's customer disclosure rule, SEC Rule 605, requires market centers to disclose monthly data about the quality of their trade executions. Each monthly report will disclose execution-quality data based on the previous month's trading activity.

Pursuant to the "Joint Industry Plan, Order Approving Plan Establishing Procedures Under Rule 605 by American Stock Exchange, Boston Stock Exchange, Chicago Stock Exchange, Cincinnati Stock Exchange, National Association of Securities Dealers, New York Stock Exchange, Pacific Exchange, and Philadelphia Stock Exchange" (Joint Industry Plan) the execution-quality data provided in the reports must be in a standard format.

Report for Fidelity's market centers
SEC Rule 605 monthly data

More information
SEC's Joint Industry Plan
Financial Industry Regulatory Authority (FINRA): SEC Rule 605
Quality measurement definitions (PDF)

SEC Rule 606

Under SEC Rule 606, broker-dealers that route orders on behalf of customers are required to prepare quarterly reports that disclose the following information:

  • The percentage of total customer orders that were nondirected orders, and the percentages of total nondirected orders (defined as any order that a customer has not specifically instructed to be routed to a particular venue for execution) that were market orders, limit orders, or other orders
  • The identity of the venues to which a significant percentage of total nondirected orders were routed for execution
  • The percentage of total nondirected orders routed to the venue, and the percentages of total nondirected market orders, nondirected limit orders, and nondirected other orders that were routed to the venue
  • Terms of the material aspects of the broker-dealer's relationship with each venue identified above, including a description of any arrangement for payment for order flow and any profit-sharing relationship

The reports are to be made public for each calendar quarter and published no later than one month after the end of the quarter. Another section of this rule requires annual public notification that this information is available.

Read the Fidelity SEC Rule 606 report for this quarter (PDF).

Pursuant to the rule, customers can request details on the identity of the venue, time of execution, and whether the order was directed to a specific venue per customer request in the six months prior to the request. Through a Fidelity representative, a customer may also request up to six months of this information in hard copy on all orders for a specific time period and/or on individual securities. The collection period for this information began on July 2, 2001. This information is available online although it is not required by SEC rules.

close

Dollar Value of Price Improvement

Many brokerage firms will display the percentage of shares that are price improved without showing additional detail. However, we go a step further and show you the average dollar price improvement, which is the actual savings per order.

The dollar value of shares that are price improved is determined by comparing the execution price to the National Best Bid (NBB), if you are selling, or National Best Offer (NBO), if you are buying, at the time of the trade; multiplied by the number of shares executed. The dollar value price improvement is the overall monetary improvement of executed orders, taking into account orders that are executed better and worse than the NBBO

Fidelity Price Improvement vs. Industry Average* for Period Between April 1, 2014 and March 31, 2015

Order size Fidelity average Industry average
100 Shares $1.228 $0.125
1,000 Shares $9.143 $1.329

*Based on data from CoreOne Technologies for SEC Rule 605 eligible orders executed at Fidelity between April 1, 2014 and March 31, 2015. The comparison is based on an analysis of price statistics that include marketable orders: market orders and limit orders at the National Best Bid and offer (NBBO), between 100 – 1,999 shares, excluding orders with special handling instructions and order sizes greater than 2,000 shares. A data range of 100 – 499 shares is used for the 100 shares order size and a data range of 100 – 1,999 shares is used for the 1,000 shares order size. Average price improvement for order sizes outside of these data ranges will vary. Fidelity's average retail order size for SEC Rule 605 eligible orders during this time period was 430 shares, or 834 shares when including block trades. Price improvement examples are based on averages and any price improvement amounts related to your trades will depend on the particulars of your specific trade.

If you compare Fidelity's average price improvement to the industry average on a typical Fidelity 1,000 share equity market order above, and applied the $9.14 difference against Fidelity's online commission rate of $7.95, you would have essentially paid a zero commission to trade.

close

Sample Order Status

For illustrative purposes only.
close

Sample Trading Profile

For illustrative purposes only.
close

Order Flow Management Team

To ensure our high standards are met, our 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 National Best Bid or Offer (NBBO).
  • Take corrective action for failure to meet our execution quality standards.
close

execution price

the value per share at which a trade filled; for equities or options, if a trade receives multiple executions, the execution price is displayed as a weighted average; the weighted average is the total dollar value of the trade divided by the number of shares traded

Questions?

Skyline-Right-Rail
Trade Execution (6:16)

Watch this brief video to learn more about the trade process and why it is so important.

1. Barron's article "Fidelity Tops in Price Improvement for Retail Investors" published on 7/11/15, based on data for Q1 2015 provided to the Financial Information Forum (FIF) by participating brokers on a voluntary basis. Statistics were provided for standardized order sizes for market orders on S&P 500 stocks. Statistics are produced on a best efforts basis and provided "as is" without warranty of any type.
2. To compare brokers, Barron's composed a score that reflects how much of a broker's flow it sends to the best-performing market makers including Citadel Securities, UBS, Two Sigma Securities, KCG Holdings, Susquehanna International Group and Citigroup's Automated Trading Desk using a volume-weighted mean for market orders of all reported sizes for both S&P 500 and Non-S&P 500 securities. Broker scores are based on the overall execution quality of market makers for Q4 2014 routing of market orders for both NYSE and Nasdaq stocks using the market makers' effective spread to quoted spread (E/Q).
3. As of 4/15/2015
4. Qualifying market orders on the S&P 500® will be executed at the National Best Bid or Offer (NBBO) in 1 second or less, or they are commission-free.
Executions represent SEC Rule 605 eligible market orders between 100-1,999 shares executed as agent through third-party market makers and listed exchanges and as principal by NFS-affiliated desks. National Financial Services (NFS) is an affiliated broker-dealer of Fidelity Brokerage Services. Analysis includes only those exchanges or market makers receiving at least 2% of Fidelity Brokerage Services LLC monthly NASDAQ and Listed share volume. Source: CoreOne Technologies

System availability and response times may be subject to market conditions.

433964.25.0