Trading and Exchanges Chapter 25: Internalization, Payment for Order Flow, and Crossing Networks
If you use Robinhood or any zero-commission broker, this chapter explains how the sausage is made. You pay zero commission, sure. But someone is paying your broker for the privilege of filling your order. That someone is a wholesale dealer, and the payment is called “payment for order flow.” Chapter 25 breaks down how this works and whether it hurts you.