Smart order routing (SOR) is an automated online trading method which detects and executes the best available trading opportunity throughout a given range of financial markets and trading venues. In essence, when implementing SOR an investor feeds a pre-established set of conditions to a set of bots or algorithms which then scan multiple markets using their given criteria in order to find the optimal environment to execute a given order. Investors typically program the algorithms used to run SOR to differentiate various trading venues in accordance with common parameters such as latency levels, fee structures, and available liquidity, as well as more complex parameters specific to that investor's unique trading strategy. As a result, running SOR requires robust API integrations across different platforms in order to effectively utilize this data-intensive, multiplatform trading strategy.
