ProcessIntermediate
Payment for Order Flow (PFOF)
syn. PFOF
A practice where a broker receives compensation from a market maker or third party for routing client orders to them, creating a potential conflict of interest.
Last updated: February 10, 2026
1
A broker receives client orders for execution.
2
Instead of routing to the best execution venue, the broker routes to a market maker that pays for the flow.
3
The market maker compensates the broker per order or per share/lot.
4
The market maker profits by trading against the informed and uninformed flow.
5
The broker may pass some or none of the savings to the client.