Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                

About: Payment for order flow

An Entity of Type: Market101097292, from Named Graph: http://dbpedia.org, within Data Space: dbpedia.org

Payment for order flow (PFOF) is the compensation that a stockbroker receives from a market maker in exchange for the broker routing its clients' trades to that market maker. It is a controversial practice that has been called a "kickback" by its critics. Policymakers supportive of PFOF and several people in finance who have a favorable view of the practice have defended it for helping develop new investment apps, low-cost trading, and more efficient execution.

thumbnail
Property Value
dbo:abstract
  • Payment for order flow (PFOF) is the compensation that a stockbroker receives from a market maker in exchange for the broker routing its clients' trades to that market maker. It is a controversial practice that has been called a "kickback" by its critics. Policymakers supportive of PFOF and several people in finance who have a favorable view of the practice have defended it for helping develop new investment apps, low-cost trading, and more efficient execution. In general, market makers like Citadel LLC, Virtu Financial, and Susquehanna International Group are willing to pay brokers for the right to fulfill small retail orders. The market maker profits from the bid-ask spread and rebates a portion of this profit to the routing broker as PFOF. Another fraction of a penny per share may be routed back to the consumer as price improvement. Brokers in the United States that accept payment for order flow include Robinhood, E-Trade, Ally Financial, Webull, Tradestation, The Vanguard Group, Charles Schwab Corporation, and TD Ameritrade, while brokers that do not receive payment for order flow include Interactive Brokers (pro accounts that are charged commissions), Merrill Edge, Fidelity Investments, and . In the United States, accepting PFOF is allowed only if no other exchange is quoting a better price on the National Market System. The broker must disclose to the client that it accepts PFOF. Transactions must be executed at the best execution, which could mean the best price available or the speediest execution available. PFOF is not allowed in Canada, so Canadian brokers charge commissions. It is also banned in the United Kingdom. According to Euronext, European authorities have regulated payment for order flow, and the practice is allowed in a number of national jurisdictions across Europe. (en)
dbo:thumbnail
dbo:wikiPageExternalLink
dbo:wikiPageID
  • 22237355 (xsd:integer)
dbo:wikiPageLength
  • 16503 (xsd:nonNegativeInteger)
dbo:wikiPageRevisionID
  • 1124073473 (xsd:integer)
dbo:wikiPageWikiLink
dbp:wikiPageUsesTemplate
dct:subject
rdf:type
rdfs:comment
  • Payment for order flow (PFOF) is the compensation that a stockbroker receives from a market maker in exchange for the broker routing its clients' trades to that market maker. It is a controversial practice that has been called a "kickback" by its critics. Policymakers supportive of PFOF and several people in finance who have a favorable view of the practice have defended it for helping develop new investment apps, low-cost trading, and more efficient execution. (en)
rdfs:label
  • Payment for order flow (en)
owl:sameAs
prov:wasDerivedFrom
foaf:depiction
foaf:isPrimaryTopicOf
is dbo:wikiPageRedirects of
is dbo:wikiPageWikiLink of
is foaf:primaryTopic of
Powered by OpenLink Virtuoso    This material is Open Knowledge     W3C Semantic Web Technology     This material is Open Knowledge    Valid XHTML + RDFa
This content was extracted from Wikipedia and is licensed under the Creative Commons Attribution-ShareAlike 3.0 Unported License