Fees from market order routing in different fee-strucuted exchanges

External question — Quantitative Finance Stack Exchange Author: ragoragino Original post: https://quant.stackexchange.com/questions/33578 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Let's have two exchanges A and B. Exchange A has maker-taker fee structure, while exchange B has taker-maker fee structure. What happens when a broker routes market order to an exchange B at the time when NBBO is at the exchange A? Will the order be automatically routed (when the order type allows routing) to the exchange A and therefore the broker will have to pay the routing fee from exchange B and taker fee from exchange A?

External answer — Quantitative Finance Stack Exchange Author: amdopt Original post: https://quant.stackexchange.com/a/33580 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. What happens when a broker routes market order to an exchange B at the time when NBBO is at the exchange A? Assuming the order was a Buy order, your market order just became the best bid and it is on exchange B. If the best offer was on B, order filled, if not it will route to A (assuming routing allowed). the broker will have to pay the routing fee from exchange B and taker fee from exchange A? The fees paid will land in the client account. The broker doesn't pay anything. If you have some sort of flat fee the you pay per trade then the broker absorbs (not pays) the trade fees against the flat (exorbitant) fee you paid the broker. Either way you want to look at it, the client account pays.