The order most likely goes to Schwab, Schwab sends it on to an exchange or a third party that does that. The order should be filled at the exchange at the best possible price.
Why and how it took an hour to fill, I cannot tell you. It could have been held at Schwab under some technical order not to send orders with fraction of cents. I doubt the delay was at the exchange if it made it there, regardless of order type.
Do you know the precise procedures by which an order is executed through Schwab?
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