“Sweeping” or “Sweeping to fill” means that the order is divided into multiple parts, each part pointing to the best offer in multiple markets, in an effort to do the best Possibly the best average price to cover the entire order.
For example, if a trader places an order to buy 1,000 shares of a specific stock, and the best price for 500 shares is on Exchange A, another 300 shares are on Exchange B, and the remaining 200 shares are on Exchange C, the sweep order will divides the original order and sends each part to the appropriate exchange.
This ensures traders get the best price for every part of the order, rather than simply filling the entire order on one exchange, which may not offer the best price for all 1,000 shares.
Sweeps are often automated by algorithms in high-frequency trading, which are able to split and send orders to multiple exchanges within milliseconds.
This strategy is beneficial in modern financial markets where trading is dispersed across various exchanges and trading venues, each with its own liquidity and pricing.
It should be noted that since orders are executed on multiple exchanges, scanning orders may involve multiple transaction fees. Traders should consider these costs when deciding to use a comprehensive order strategy.
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