European Brokerage · glossary
Money a market maker, a firm trading from its own stock, pays a broker for each client order sent to it. It lets a broker charge little, but pulls orders towards whoever pays instead of the best result. EU law bans it for retail clients, and disclosure cannot save it. Clause 8.3 · Chapter 6 · see Inducement
Explained in Chapter 6, Fees, Inducements and the Ban on Payment for Order Flow, of European Brokerage.
A market maker is a firm that is always ready to buy or sell shares, trading for itself. Each client order is a trade it can earn on, so it may pay a broker for each order sent to it. That money is payment for order flow. It lets a broker charge clients very little, but it pulls orders towards whoever pays instead of the best result.Read Chapter 6, Fees, Inducements and the Ban on Payment for Order Flow →
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