Why do interactive brokers charge more for directed orders? Not just a little more, but *double* the commission, and no exchange rebates available.
It is clearly less work for them to simply send an order straight through to an exchange, rather than processing it themselves.
Therefore there *has* to be a profit motive for IB in effectively forcing clients to use SMART. This is a fact.
There are two ways I can think of that they profit from SMART:
1) They can internalize order…