Payment For Order Flow (PFOF) involves brokerage firms receiving compensation for directing customer orders to certain market makers or parties for execution. This practice is akin to front running, where someone executes trades based on advance knowledge of pending orders from other parties, effectively taking advantage of the market.
Front running is generally considered unethical and is prohibited in many countries because it undermines market fairness and integrity. It gives those with advance information an unfair advantage over other market participants.
Payment For Order Flow is legalised front running, period.
In most of the countries is banned and I truly cannot understand how can it be legal in such a developed market like #US when investors are being so obviously taken advantage of 🤯 https://t.co/hYGhj3L2MG
— JustDario 🏊♂️ (@DarioCpx) May 7, 2024