WHAT IS PAYMENT FOR ORDER FLOW?
Payment for order flow is essentially the practice of a PFOF broker routing orders through a series of market-making firms, instead of directly to a stock exchange.
Payment for order flow is essentially the practice of a PFOF broker routing orders through a series of market-making firms, instead of directly to a stock exchange.
The broker gets paid by these firms for redirecting trades to a particular market maker for completion. These companies pay a small amount to participating brokers and complete the order.
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The market makers gain from this flow of trades in two ways. First, as market makers, they are typically able to sell at the (higher) ask and buy at the (lower) bid.
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These spreads aren't typically very wide when trading in stocks, but if you make tens of millions of pennies a day, you're talking about real money pretty soon.
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The second way they gain is from the information itself. Since the orders come through the market making firm before hitting an exchange, the market makers are able to see trends as they develop.
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So they can see when a few orders to buy starts to grow into a flood, giving them an opportunity to try to buy the stock before that flood of orders develops. This is known as "front running"
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In the case of $AMC and $GME, market makers have been known to route retail buys through off market exchanges, or #DARKPOOLS #AMC buys in the dark pool have consistently been over 60% per day!
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Market makers will route retail BUY orders through the dark pool, while filling sell orders on LIT EXCHANGES, creating false selling pressure. This is how they're able to suppress the price of certain companies.
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HOW DO YOU KEEP YOUR BUY ORDERS FROM GOING TO THE DARK POOL?
The current shares that you own, are safe. PFOF only effects future or current buy orders. See if your broker participates in PFOF. If they do, you can open an account with a NON PFOF PARTICIPATING broker
8/11
The current shares that you own, are safe. PFOF only effects future or current buy orders. See if your broker participates in PFOF. If they do, you can open an account with a NON PFOF PARTICIPATING broker
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for any future buy orders that you may be planning.
I personally use @Fidelity's Active Trader Pro. It's currently only available on your computer, and not on mobile devices, but it lets you route your orders
9/11
I personally use @Fidelity's Active Trader Pro. It's currently only available on your computer, and not on mobile devices, but it lets you route your orders
9/11
through the lit exchange (like the NYSE).
This is by no means financial advice, I'm just getting tired of waiting for the #MOASS. The more apes that start routing their orders through lit exchanges, the quicker we get this thing going.
10/11
This is by no means financial advice, I'm just getting tired of waiting for the #MOASS. The more apes that start routing their orders through lit exchanges, the quicker we get this thing going.
10/11
This has been a public service announcement, courtesy of your friendly neighborhood @StonkVision
#APESNOTLEAVING #ApesTogetherStrong #APESMART
11/11
#APESNOTLEAVING #ApesTogetherStrong #APESMART
11/11
@UnrollHelper unroll please
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