Smart order routing is another application of technology and mathematics, for trading in cryptocurrency to make big profits. It is not something that we can say is a new concept; smart order routing is a fairly mature thing, which was used in equity markets earlier, and now it has picked on from there to penetrate into many other instruments of trading and investment, including the much buzzed field of cryptocurrency trading. So what exactly is smart routing and how does smart order routing work?
What is Smart Order Routing
Put in the simplest of words, smart order routing refers to the principle of executing a trade order, be it any instrument, in such a way so as to optimize it to the best extent possible. So if we're talking about cryptocurrency, smart routing is checking all possible trading avenues at a given point in time, and then channeling the buy or sell order placed by the investor, via the best route possible. Best is considered the one that is the most profitable to the investor, so both time and financial aspects are optimized and balanced in the required way.
How Does Smart Routing Work
For cryptocurrency there are many exchanges and many associated rates. There are many other trading platforms as well, like executium.com etc. which work towards such transactions. Also if we talk about the number of cryptocurrencies, these are also unlimited kind of.
Next, the smart order routing works by considering what are the pre-conditions and criteria set by the buyer or seller of the cryptocurrency for some particular trade order, what are the constraints if any, what are the preferences and what are the market and regulatory conditions at a given point in time. Based on this, the smart order routing system comes up with a list of orders in order of priority that can be transacted. When considering how smart order routing works, one must keep in mind that most often, these are automated systems. Once you place your status as an investor, the system will automatically execute the best possible order.
Who Can Use a Smart Order Routing System
As of now, anyone can use a smart order routing system if they are trading in cryptocurrency, especially Bitcoin. The only requirement is that there must be multiple channels, which are there in cryptocurrency, for the system to check and run an order. Large or small does not matter. Smart order routing systems are typically based on complex algorithms, so one must buy them from reputable companies like executium.com, so that trades are optimized reliably well. Executium.com is also one such crypto consultancy that also ensures that redundancy in the SOR system is avoided as it is becoming more and more common and more and more used, with each passing day. An investor can not only use this system, to obtain the current prices, but can also do so to carry out the trades automatically when clubbed with complex trading bots and algorithms.