Payment for order flow has gone from a term that was glossed over in a standard user agreements to the most debated topic in retail trading. There are a lot of misconceptions about how this transaction works, and the topic is quite polarizing depending on your perspective. This article will try to provide the market of payment for order flow transaction with as little bias as possible. There are ultimately benefits and drawbacks for implementing payment for order flow.

This article also generalizes aspects of market-making and market microstructure, the processes behind these transactions are much more complex then how…

Diego Alvarez

CU Boulder undergraduate studying math. Interested in machine learning, algorithmic trading, and cyber security. @dial0663

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