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 flow and cherry pick fills. I always used to think this was the reason, but as far as I remember IB vehemently deny that this is what they do (now at least). 2) A very helpful friend at an investment firm suggested a different reason. Exchanges offer discounts for submitting a batch of orders in large volume. Apparently above a certain volume threshold on certain exchange charges may be wavied entirely on additional lots. This would mean that IB would profit from grouping client orders together and submitting them in one batch. The upshot of this is that the longer IB delays your order, the more other client orders it will be grouped with, and the less IB will pay. I don't need to tell anyone how meaningful microseconds let alone tens or hunderds of milliseconds in today's markets, and what a clear opposition to client interests delaying orders represents. I have been running automated strategies for a while now with IB and I have a server hosted in New Jersey 2 milliseconds from them, but I am much less than happy with the way SMART has been behaving. Does anyone have any further light to shed on this? Perhaps someone from IB enlighten me as to which of the above are true, or another reason I haven't thought of, for why simpler directed orders cost more than double SMART orders?