Hybrid Routing Decision Tree

How to Read This Diagram

Every incoming order enters the Routing Engine, which applies a set of rules to determine whether the order goes A-book (external LP execution) or B-book (internal dealing desk). The decision tree is invisible to the client -- both paths result in a fill on the same platform.

Common Routing Criteria

• Client profitability profile: Consistently profitable clients are more likely to be routed A-book; consistently losing clients may be kept B-book.
• Order size: Large orders that exceed the broker's risk appetite are routed externally; smaller orders are internalized.
• Instrument volatility: During high-volatility events (NFP, FOMC), brokers may shift more flow to A-book to reduce exposure.
• Time of day: During low-liquidity sessions, internalization may increase as external LP spreads widen.
• Net exposure: If the broker's aggregate position in a pair is already large, new orders in the same direction may be A-booked.

Transparency Considerations

The fundamental transparency issue with hybrid routing is that the client cannot determine which path their order took. Both fills appear identical on the platform. The broker's routing logic, profiling criteria, and the proportion of A-book vs B-book flow are rarely disclosed. This opacity is the core concern for institutional clients evaluating hybrid execution brokers.