What Does This Article Help Solve?

Why This Matters for Your Trading Workflow

• Avoid Schwab’s new Not Held fees by shifting trades to ALGO execution with the right setup.
  
  

• Protect execution quality by aligning POV, TWAP, and VWAP workflows with Schwab’s requirements.
  
  

• Prepare operationally for Schwab's announcement by understanding timing, tags, and workflow changes now.
  
  

• Reduce manual intervention and downstream issues by routing trades correctly the first time.
  
  

• Make informed decisions about brokers, tools, and trade sizing to keep trading efficient and predictable.
  
  

• Orion launched a new Advanced OMS workflow that allows utilizing Schwab ALGOs, among other capabilities, to help navigate this change. Review Advanced Order Management System Fact Sheet for more information.

What is Changing with Schwab's Not Held Fees

Schwab is introducing new fees for trades executed through its Not Held desk. Trades routed through approved ALGO strategies—POV, TWAP, and VWAP—avoid these fees when the required execution details are provided. To support this change, Orion is developing enhancements that allow firms to pass Schwab-specific ALGO tags directly through the Orion Trading platform. These updates enable proper routing through Schwab’s third-party ALGO brokers and reduce the need for manual desk intervention.

Firms must evaluate their current trading workflows, determine where ALGO execution fits, and plan operational adjustments ahead of the deadline to maintain efficient, fee-aware execution.

FAQs

Q: Will Schwab's Auto-Not Held rules remain in place for the 10,000-share threshold and the 5% ADV rule?

A: Schwab has informed Orion that the 10,000-share Auto-Not Held threshold will no longer be the default. Schwab will offer opt-in share thresholds of 5,000, 10,000, or 15,000 shares. Your firm must contact Schwab to enable these Auto-Not Held threshold options. Schwab’s 5% ADV rule remains in effect and will be subject to the $5 Not Held Fee. To avoid this rule, you must contact Schwab to request an opt-out. Orion can display a block’s ADV percentage in the Blocks grid when using real-time pricing.

Q: Can I send ALGO trades without incurring fees? 

A: Yes, Schwab has made it clear you do not need to pay fees if you utilize an algo of POV, TWAP, or VWAP, but these three algos require additional custom tags outlined below.  Without this additional information, the ALGO will not automatically process through Schwab’s system, and it will incur fees due to manual intervention needed from Schwab’s desk. Orion's Advanced OMS Offering enables passing these additional tags to Schwab to avoid the fees.

Additional tags:
Destination: You must select a 3rd party broker to execute these ALGOs through. See the broker destination question below for more information.

• Start Time
• End Time
• Target % (For POV)

Other optional tags include: Max Participation %, On Open, On Close, Would If Price

Q: Does Orion provide a Not Held or RFQ workflow through Schwab that avoids fees? 

A: No. Aside from ALGO routing, Orion does not offer a method to bypass Schwab's Not Held fees.

Q: Will Orion support sending ALGOs to Schwab?

A: Yes, Orion's new Advanced OMS offering provides the Schwab-specific custom tags to POV, TWAP, and VWAP orders can be routed automatically without incurring fees.

Q: Is Schwab supportive of Orion's ALGO integration? 

A: Yes, Orion and Schwab are collaborating closely.

Q: Will Orion add ALGO functionality into TOM?

A: No enhancements to TOM are planned. It's important to note that Orders sent without requiring tags will incur fees.

Q: When will Orion complete development for ALGO tags?

A: Delivery is still TBD. Contact Schwab for more information.

Q: What should I be evaluating in how we execute trades during this process?

A: 1. Determine whether ALGOs fit your firm's strategy.

2. Reduce reliance on Schwab's Not Held desk using Orion's real-time pricing and ADV tools.

Q: Why must I select a broker?

A: Schwab uses three approved third-party Brokers:  Citadel, Goldman Sachs, and Virtu.  Schwab remains the Executing Broker.

Q: How do I enable ALGO trading? 

A: 

1. Contact your designated block desk at Schwab to request FIX ALGO enablement.
2. After approval, notify Orion at sme-trading@orion.com | 888-352-3257 to update entitlements.
3. Orion enables ALGO fields and provides training materials.

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