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Execution Quality

Q: What is a Market Maker?

A 'market maker' is a firm that stands ready to buy or sell a stock at publicly quoted prices. As a way to attract orders from brokers, some market makers will pay your broker for routing your order to them.

Q: What is payment for order flow?

Payment for order flow generally refers to compensation paid to firms or exchanges in return for routing customer orders to the venue for execution. As noted above, some market markers pay your broker for routing your order to them-this is a form of payment for order flow.

Q: How does Merrill route their orders?

Merrill routes its orders to its affiliated broker-dealer, BofA Securities, Inc., for handling. Merrill's customer orders are routed for execution in various venues. Merrill's routing decisions are supported by periodic reviews designed to ensure that its venue choices consistently demonstrate their ability to provide our customers with quality execution for their trades.

Merrill is committed to best execution so you can trade with confidence

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Offering best execution is our top priority

Merrill does not receive payment for order flow routed to third-party market makers. Instead, we handle your order so as to obtain a competitive execution price, and we regularly monitor the quality of our executions that we route to third parties.

We are committed to providing you with best execution for your trades across investment types-stocks, ETFs, mutual funds, options and fixed income securities.

Our Stats for Past Orders

99.23%

of orders executed at or
better than quoted price

How it's measured popup

^$23.10

average savings of market
orders of 1,000 shares

How it's measured popup

.007^seconds

average execution speed
for market orders

How it's measured popup

Source: S3, a third-party analytics provider. Figures include orders sized 100–1,999 of S&P 500 stocks only, for the 1st quarter ending March 31, 2024.

How does Merrill ensure best execution for your orders?

Seeking the Best Available Price

We handle your orders with a goal of seeking the best available price for trades.

Minimizing Market and Price Impact

We tactically break orders into smaller pieces as needed, routing them to multiple market centers for display or execution with a goal of minimizing market impact.

Monitoring Execution Quality

We regularly monitor the quality of our executions and are committed to providing you with best execution.

Effective/Quoted Ratio

The Effective/Quoted Ratio compares the average effective spread with the quoted spread, or the difference between National Best Bid and Offer (NBBO) at time of order entry and a firm's trade execution.

When an order is executed exactly at the NBBO, the Effective/Quoted Ratio is 100%. In other words, a 100% Effective/Quoted Ratio indicates an order was executed at bid for a sell order or at offer for a buy order. A 0% Effective/Quoted Ratio indicates that the order received the midpoint between the bid and offer.

Simply put, lower is better.

Learn how it's measured popup

Percentages lower than 100 indicate a better execution

National Best Bid and Offer

100%

Industry Average

55%

Merrill

22.19%

Source: S3, a third-party analytics provider. Figures include orders sized 100–1,999 of S&P 500 stocks only, for the 1st quarter ending March 31, 2024.

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Frequently Asked Questions

Expand all

What is a Market Maker?

What is the National Best Bid and Offer (NBBO)?

National best bid and national best offer means, with respect to quotations for listed stocks, the best bid and best offer for such security that are calculated and disseminated on a current and continuing basis by a plan processor pursuant to an effective national market system plan. In other words, it's a quote reflecting the highest bid and lowest offer price for round lots of a security, sourced from available exchanges and trading venues.

What is payment for order flow?

How does Merrill route their orders?

References to NBBO are measured from the time orders are presented to Merrill's market center affiliate (BofA Securities, Inc.) BofA Securities, Inc. ("BofAS") is a registered broker-dealer, Member SIPC popup and wholly owned subsidiary of Bank of America Corporation.

Merrill does not receive payment for order flow from liquidity providers to which we route our customer orders in equity securities. Merrill receives rebates from, and pay fees to, certain registered securities exchanges for providing or taking liquidity on those exchanges, according to those exchanges' published fee schedules approved by the SEC. In some cases, the rebates received by Merrill from an exchange may, over a period of time, exceed the fees paid to the exchange. Merrill may also participate in the options order flow programs sponsored by the NYSE American Options, the NYSE Arca Options, the Cboe options exchanges, and the Nasdaq options exchanges. These exchange-sponsored programs offer payments for listed option orders that are directed to such options markets. Additional information on Merrill's order routing and rebates are available on Merrill's Rule 606 reports.

Routing Disclosures Made Pursuant to Rule 606 of SEC Regulation NMS
Rule 606 of SEC Regulation NMS requires broker-dealers receiving non-directed client orders to publicly disclose, on a quarterly basis, the top execution venues to which such orders are routed for execution. Broker-dealers also must disclose material aspects of the relationships they maintain with the identified execution venues. The Rule 606 statistics for Merrill Lynch, Pierce, Fenner & Smith Incorporated are available for public review on the Public S3 website popup.

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Investment products offered through MLPF&S and insurance and annuity products offered through MLLA:

Are Not FDIC Insured	Are Not Bank Guaranteed	May Lose Value
Are Not Deposits	Are Not Insured by Any Federal Government Agency	Are Not a Condition to Any Banking Service or Activity

Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.

Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

This material is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. Merrill offers a broad range of brokerage, investment advisory (including financial planning) and other services. Additional information is available in our Client Relationship Summary (PDF).

Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp."). MLPF&S is a registered broker-dealer, registered investment adviser, Member Securities Investor Protection (SIPC) popup and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").

Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and wholly owned subsidiary of BofA Corp.

Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation.

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Unlimited $0 Trades

With Merrill Edge Self‑Directed, get unlimited free online stock, ETF and option trades with no trade or balance minimumsFooter footnote ^b

Options contracts and other fees may applyFooter footnote ^a

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Other fees may apply. Free and $0 means there is no commission charged for these trades. $0 option trades are subject to a $0.65 per-contract fee. Sales are subject to a transaction fee of between $0.01 and $0.03 per $1,000 of principal. There are costs associated with owning ETFs. To learn more about Merrill pricing, visit our Pricing page.
Footer footnote

Merrill waives its commissions for all online stock, ETF and option trades placed in a Merrill Edge^® Self-Directed brokerage account. Brokerage fees associated with, but not limited to, margin transactions, special stock registration/gifting, account transfer and processing and termination apply. $0 option trades are subject to a $0.65 per-contract fee. Other fees and restrictions may apply. Pricing is subject to change without advance notice.

For broker-assisted trades through Merrill Edge, you will be charged a fee equal to the lower of $29.95 or 5.00% of the principal amount of the transaction. Further, there are indirect fees, such as annual management and other similar fees, that are charged by the manager or sponsor of an exchange-traded fund and of a closed-end fund, as disclosed in the product's prospectus.

Investment products offered through MLPF&S and insurance and annuity products offered through MLLA:

Are Not FDIC Insured

Are Not Bank Guaranteed

May Lose Value

Are Not Deposits

Are Not Insured by Any Federal Government Agency

Are Not a Condition to Any Banking Service or Activity

Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.

The performance data contained herein represents past performance which does not guarantee future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. For performance information current to the most recent month end, please contact us.

Net Asset Value (NAV) returns are based on the prior-day closing NAV value at 4 p.m. ET. NAV returns assume the reinvestment of all dividend and capital gain distributions at NAV when paid.

Market price returns are based on the prior-day closing market price, which is the average of the midpoint bid-ask prices at 4 p.m. ET. Market price returns do not represent the returns an investor would receive if shares were traded at other times.

Returns include fees and applicable loads. Since Inception returns are provided for funds with less than 10 years of history and are as of the fund's inception date. 10 year returns are provided for funds with greater than 10 years of history.

Before investing consider carefully the investment objectives, risks, and charges and expenses of the fund, including management fees, other expenses and special risks. This and other information may be found in each fund's prospectus or summary prospectus, if available. Always read the prospectus or summary prospectus carefully before you invest or send money. Prospectuses can be obtained by contacting us.

Expense Ratio – Gross Expense Ratio is the total annual operating expense (before waivers or reimbursements) from the fund's most recent prospectus. You should also review the fund's detailed annual fund operating expenses which are provided in the fund's prospectus.

Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation ("BofA Corp.").

Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and wholly owned subsidiary of BofA Corp.

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