Discover and read the best of Twitter Threads about #PFOF

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Let’s talk a little about retail brokers receiving payment for order flow (PFOF), in light of all the major online retail brokers now moving to a zero commission model. Indulge me please in this thread… #PFOF #MarketStructure
Sometimes industry jargon mask simple and logical truths. If a broker is SELLING your order to a market maker (MM), whether old school or high-speed evolved, that MM is buying it cuz they're making money by doing so. By subsecond quote arbitrage, and data collection. It is a vig.
It was pioneered by… Bernie Madoff in the 90s. At Instinet, sometimes employees managed or worked client orders. Our management encouraged us to whenever possible, route to MADF instead of “dotting” or using a floor broker. Get paid instead of pay…
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