Directed Trading

Directed Trading gives you greater control over where your trades are routed for execution and faster access to the market. The Directed Trade ticket combines a single trade ticket, depth of book quote display, and time and sales data (Active Trader Pro® desktop only), providing better insight into the current market for a security and more in-depth information as to where orders are accumulating across the various exchanges and Electronic Communication Networks (ECNs). Use directed trading to send your orders to a variety of destinations or to use advanced algorithms.

Current routable destinations include:

  • Fidelity Determines Route (AUTO)
  • NYSE Archipelago (ARCA)
  • Fidelity Dynamic Liquidity ManagementSM (FDLM)
  • NASDAQ (NSDQ)
  • NYSE Hybrid (NYHY)
  • Target Volume 5% (TV05)
  • Target Volume 10% (TV10)
  • Target Volume 20% (TV20)
  • Volume Weighted Average Price (VWAP)

A more detailed description of all available routes can be found in the Directed Trade: Routes section.

  • Introduction

    All customers who have access to Fidelity's Active Trader Pro PlatformsSM are eligible for Directed Trading. Once you have accepted the terms of your user agreement, you can access the Directed Trading ticket in one of two ways:

    1. Select Directed Trade from the Trade & Orders menu.
    2. Set Directed Trading as your default trade ticket in Trade Settings. When this preference is set, any functionality that launches a trade ticket (such as the Action menu, right-click menu, or selecting a Bid/Ask) and is suitable for Directed Trading will launch the ticket with the relevant symbol seeded.

    Directed Trading quotes are always streaming, regardless of the update frequency you set in your general preferences. The Directed Trading tool provides a streaming composite quote above the depth of book display, with the top 25 Bid/Ask quotes and sizes displayed in the book. You can resize the tool window vertically to determine how much depth you wish to display. Quotes are sorted by price, size, time, and then alphabetically by market center. Also, multiple quotes may be included from individual ECNs or exchanges at different price levels, allowing you to see true market depth. While you may see a quote from a specific market center, this does not guarantee that you will be able to direct a trade there. See the Directed Trading: Available Routes section to see all the market centers to which you may route trades.

  • Directed Trading Time and Sales (Active Trader Pro desktop only)

    Time and Sales data is displayed in a streaming, real-time format. The Time and Sales component displays all trades that occur on a given security, regardless of trade condition and market session.

    • Shares traded at or below the Bid price will be displayed in red.
    • Shares traded at or above the Ask price will be displayed in green.
    • Shares traded between the Bid and Ask price will be displayed in white.

    Note: Additional real-time, intraday, and historical Time & Sales data is available in the Time & Sales tool, accessible from the Quotes & Watch List menu.

  • Time in Force (TIF)

    The TIF dropdown allows you to select the length of time you would like your order to remain active. The following selections are available, depending on the route chosen and the time of day:

    • 'til 9:28 AM (equity/ETF only) ‒ Orders will be eligible for execution from entry time until 9:28 AM ET.
    • Good 'til 9:15 AM (options only) ‒ Orders will be eligible for execution from entry time until 9:15 AM ET.
    • Day ‒ Orders will be eligible for execution from entry time until 4:00 PM ET.
    • Day+ ‒ Orders will be eligible for execution from entry time until 8:00 PM ET for those routed to ARCA or NSDQ and 6:00 PM ET for those routed to FDLM.
    • Good 'til Canceled (GTC) ‒ Orders will be eligible for execution from entry time until expiration (usually 180 days from entry date).
    • Immediate or Cancel (IOC) ‒ This gives the order a requirement that all or part of the order be executed immediately after it has been entered. Any portions not executed are immediately canceled.
    • Fill or Kill (FOK) ‒ This gives the order a requirement that it be executed immediately and completely or it will be canceled.
  • Available Routes

    The following routes are currently available for Directed Trading:

    • AUTO – This allows Fidelity to determine where your order is directed for execution. We have an internal order-flow management team dedicated to directing order flow to the best-performing market centers. 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 and Offer (NBBO). To ensure 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 our execution quality standards.
    • ARCA – The NYSE Archipelago (ARCA) is an exchange (ArcaEx) that emerged from the merger of the Archipelago ECN and the Pacific Stock Exchange. It was then acquired by the New York Stock Exchange (NYSE). It trades both Exchange Listed and NASDAQ securities. Active Trader Pro trades directed to ARCA will go proactive (meaning they will be sent to another market center if ARCA cannot fill the order and another market center can) for both NASDAQ and Exchange Listed stocks between the hours of 7:00 AM to 8:00 PM ET on regular trading days. As an exchange, ARCA is part of the National Market System for Exchange Listed stocks. If you post the best quote in the overall market on ARCA for an Exchange Listed stock, your quote will be reflected in the National Best Bid and Offer (NBBO) for that stock.
    • FDLM – Fidelity Dynamic Liquidity ManagementSM (FDLM) is Fidelity Capital Markets' proprietary intelligent order router, which provides access to displayed liquidity through ECNs and exchanges, as well as nondisplayed liquidity through dark pools. It combines historical and real-time market data with market microstructure tactics and leverages financial engineering to produce increased potential for price improvement and liquidity enhancement. Benefits include:
      • High-speed optimized routing
      • Access to over 25 market centers, including exchanges, ECNs, and Alternative Trading Systems (ATSs)
      • Improved execution quality, especially for large orders or thinly traded securities
    • Orders routed through FDLM will only execute within the National Best Bid and Offer (NBBO), providing you with price improvement opportunities. Non-displayed liquidity pools and external ATSs (dark pools) are accessed within 500 milliseconds of order entry; any unfilled portion of the order will automatically be routed to multiple ECNs and exchanges for additional executions. If any portion of the order remains unexecuted, it will be posted to one of three exchanges: NSDQ, NYSE, or ARCA. A 10-day historical market share for the security being routed through FDLM determines the exchange on which the order is ultimately posted.
    • NSDQ – The NASDAQ (NSDQ) is the largest U.S. electronic exchange and has benefited from the recent proliferation of ECNs, exchange privatization, and exchange consolidation. NSDQ is the marketplace identifier (MPID) formed by the completion of a NASDAQ single-book feed that included combining previous MPIDs such as BRUT and INET, along with NYSE/AMEX-listed symbols. This MPID represents unattributed depth data from market centers, such as ECNs or ATSs. Both NASDAQ and Exchange Listed securities can be traded here.
    • NYHY – The NYSE Hybrid (NYHY) integrates the traditional NYSE floor-based auction market with enhanced automated trading functionality. Active Trader Pro Directed Trading customers can only send orders for stocks with a primary listing on the NYSE to NYHY. The NYSE is a part of the National Market System for Exchange Listed stocks. If you post the best quote in the overall market on the NYSE for an Exchange Listed stock, your quote will be reflected in the National Best Bid and Offer (NBBO) for that stock.
    • TVOL – Target Volume (TVOL) is based on a percentage participation rate. It is designed to forecast and trade along with market volume at the targeted rate. TVOL tracks volume in the consolidated market and will increase or decrease volume as market conditions warrant. The target volume algorithm will participate in the market at a specified rate (5%, 10%, 20%). The duration of the order is directly related to how actively the stock is trading. An active stock that trades frequently and at high volumes will trade faster than an order for a stock that is less active. Orders will only be filled if enough trading volume has occurred.
    • VWAP – Volume Weighted Average Price (VWAP) strategy trades along with volume throughout the day, tracking the average price over the specified time interval. VWAP utilizes proprietary volume forecasting methods for determining order placement. The VWAP algorithm will attempt to trade proportionately to the market over the specified trading horizon. Executions will be spaced throughout the life of the order until that order is filled. The number of shares executed is directly related to the size of your order; larger orders will have a higher number of shares traded at a time. General trading patterns will generally result in your order trading at a higher frequency as the end of the trading session approaches.

    Note: A given route may not be available at all times, and this list can change at any time.

    Order duration (amount of time your order is open) and order size can impact how actively your order will trade in these ways:

    • An order entered at 9:30 AM ET will attempt to spread trading over the entire day so smaller orders will see larger gaps between executions. If you enter an order for 1,000 shares (minimum quantity required) to trade over the entire day (entered at 9:30 AM ET), you may only see a few executions, all potentially with large time gaps between them.
    • Larger orders will have the opportunity to trade with greater frequency throughout the day relative to smaller orders in the same stock.
    • Entering orders later in the day will shorten your trading window and likely increase the frequency of executions. In general, trading activity increases toward the end of the day, so given that the VWAP attempts to trade proportionately with the market, your order will trade more, and with higher frequency, toward the end of the trading session (4:00 PM ET).

    Note: Fidelity may limit the size of market orders that can be routed directly to an exchange.

  • Advanced Order Types

    Directed Trading offers five additional Advanced Order Types, which must be enabled in Directed Trade Settings.

    • Reserve Order ‒ Reserve Orders allow you to send two quantities to the market: your full order quantity and the quantity you would like to display publicly. The display quantity will be refreshed each time that quantity of shares has been executed, until the entirety of your order has been filled.
    • Discretionary Orders ‒ Discretionary Orders allow you to send two prices to the market: your "normal" display price and a discretionary price. The discretionary price is added to or subtracted from your limit price to determine a maximum or minimum price at which you are willing to trade.
    • Discretionary Reserve Orders ‒ Discretionary Reserve Orders give you the ability to combine the benefits of both a discretionary and a reserve order, hiding your full order size from the market and using a discretionary price to determine a maximum or minimum execution price.
    • Pegged Orders ‒ Pegged Orders allow you to enter an order with a price cap that will be displayed at the best market price and will move up and down as that price changes. The price cap is the maximum (buy) or minimum (sell) price that you will accept for a given trade.
    • Non-Display Orders ‒ Non-Display Orders allow you to send limit orders to the NASDAQ Market Center (NSDQ) without having them displayed to the marketplace. The display field will only appear when this order type has been enabled in settings and the route chosen is NSDQ.
  • Shortcut Buttons, Prebuilt, and Custom

    Shortcut buttons allow you to save time by predefining the details of your order for quick population of the directed trade ticket. You may enable up to a maximum of six shortcut buttons using either prebuilt or custom criteria.

    Shortcut buttons are generally only active when there is a quoted market on a security.

    Prebuilt Shortcut Buttons

    There are four prebuilt shortcut buttons, which can be enabled in the Directed Trade Settings:

    • Buy at Bid/Buy to Cover at Bid
    • Sell at Ask/Sell Short at Ask
    • Buy at Ask/Buy to Cover at Ask
    • Sell at Bid/Sell Short at Bid

    Note: The long/short trade action will default to your choice from Settings, which may be accessed in either the Directed Trading General Settings or via the right-click menu.

    Custom Buttons

    Use Directed Trade Settings to create custom shortcut buttons. After choosing the Stock Shortcuts tab in Directed Trade Settings, select the + icon.

    For each custom button, you can set the following attributes:

    • Label (an up to 10-character name that helps you identify your custom button)
    • Description (a tool-tip that displays the description of your button when you hover on the custom button)
    • Action
    • Order Type
    • Quantity
    • Price
    • Time in Force
    • Route
    • Conditions
    • Type (cash/margin)
    • Display (for reserve orders)
    • Discretionary Amount (for discretionary orders)

    Use the + and - buttons to add or remove your shortcuts. The order in which the shortcut buttons appear in Settings will be the order in which they appear on the trade ticket. To edit a shortcut, select it, edit its properties, and then use the Apply button.

    Note: There is no order validation performed on this page, so your order may not be eligible for trading as entered. If a specific button property (e.g., route or TIF) would make the order ineligible for placement, the field will be left blank in the Directed Trade ticket.

  • Placing a Directed Trade

    There are three ways to place a Directed Trade:

    1. Enter an order manually

    First, select the appropriate account number (or use the default if you have set up a default account in General Settings). Next, enter a stock symbol or use the dropdown to select a previously entered symbol. Once you have entered an account and symbol, you must fill out the additional required trade details prior to placing your order. This process can be streamlined by selecting default fields in your Directed Trading Settings, although this is not mandatory.

    If you have not selected any defaults in Settings:

    • TIF will default to Day
    • Condition will default to None

    Type will default based on your account type—cash for cash accounts and margin for margin accounts. The Type field will only display if necessary to process the order. In addition, if you select Reserve or Discretionary Reserve as your order type, the Display field will prefill any value that you have entered on your Settings page.

    Moving through the trade ticket can be done in one of two ways:

    • Select each field and either type in a value or use the available dropdowns.
    • Tab your way through the trade ticket, populating fields as they are highlighted.

    You can either type in information or use the keyboard to quickly select items from the dropdown list, such as B for Buy or L for Limit. You can also use the arrows on your keyboard to cycle through a dropdown list. For fields such as Quantity, type in the value you want and hit the Tab key to enter it and move on to the next field.

    Note: You can also use the arrows on the keyboard to quickly increase or decrease the quantity or price that you have entered into a field. Using the arrows will move quantity up or down by 100 shares and price up or down by $0.01.

    2. Enter an order by selecting a quote from the book

    First, select the appropriate account number (or use the default if you have set up a default account in General settings). Next, enter a stock symbol or use the dropdown to select a previously entered symbol. To quickly prepare your order, select one of the quotes displayed in the depth of book. Your trade ticket will be automatically populated with the following:

    • Action ‒ Selecting an Ask price will populate an action of Buy; selecting a Bid price will populate an action of Sell. If your long/short setting is set to short, selecting the Ask price will populate an action of Buy to Cover and selecting on the Bid price will populate an action of Sell Short.
    • Quantity ‒ Selecting Quantity will populate the size associated with your chosen quote.
    • Note: If you have chosen a maximum book quantity in Settings, this quantity will take precedence over the size selected in the book.
    • Order Type ‒ This will default to Limit.
    • Limit ‒ This will default to the price of the quote you selected.
    • Route ‒ This will default to the market center that posted the quote you selected. If Fidelity cannot route to the market center chosen, a default route will be selected.
    • All other fields will be prepopulated:
      • TIF to Day
      • Conditions to None
      • Type to the default type for that account (if required)

    You can manually modify any or all of the fields in the trade ticket after you have selected a quote. In addition, selecting another quote will override any existing information in the trade ticket.

    3. Enter an order using the shortcut buttons

    First, select the appropriate account number (or use the default if you have set up a default account in General settings). Next, enter a stock symbol or use the dropdown to select a previously entered symbol. To quickly prepare an order once you have created shortcut buttons, select one of your shortcuts. Your trade ticket will be automatically populated with the parameters you set up.

    A few things to remember about shortcuts:

    • For shortcut buttons to appear, they must be enabled in the Stock Shortcuts section of the Directed Trading Settings.
    • There must be a recognized quoted market from which to price the order.
    • To refresh the price on your trade ticket, select the shortcut button again. When you do this, remember that any other changes made to your trade ticket will be lost.
    • The Maximum Book Quantity setting does not impact the shortcut buttons.

    You can manually modify any or all of the fields in the trade ticket after you have selected a shortcut button. In addition, selecting a different shortcut button will override all existing information in the trade ticket.

  • Canceling/Replacing a Directed Trade

    The Cancel and Cancel/Replace functions for Directed Trading are similar to those found in other Active Trader Pro trade tickets. However, you will not be able to modify certain trade characteristics, such as display size or discretionary amount, which are specific to Directed Trading.

    Access the Order Tool in one of the following ways:

    • Select Orders from the Trade & Orders menu in the main navigation.
    • Use the Orders quick launch button.

    Note: Canceling/replacing is performed on a best-efforts basis. There is no guarantee that you will be able to cancel/replace your order since it may have already executed in part or in full.