What is the payment for the order flow?

Payment for the flow of the order is a term used to describe revenues or compensation that the broker receives by handing over orders received from clients to execute. Although this type of payment is extremely small, passing a large number of orders to third parties for processing can be very lucrative. This approach is usually used when mediation receives a large number of orders that need to be made immediately, but the company's resources exclude the ability to process these orders in time.

Using an order payment is not unusual with smaller brokerage companies. Since companies of this type often rely on a smaller broker fund to keep up with the requirements of clients in terms of purchasing and selling orders, working with other brokerage as a partner is often a practical approach. If the company has more processing orders than can be managed with internal sources, the overflow orders are directed to one or more partner companies, which then manage the process. BowlThe collection of the entire order processing fee will receive a small broker for a much smaller fee, while the company is handling the actual location is the main recipient of transaction fees.

The advantage for a small business is that when paying for the process of order flow it is possible to ensure that client transactions are processed in time, even if the volume is more than the broker can handle with its own resources. Although the company does not receive a complete commission, a small fee that is provided by a partner company is usually considered better than losing business. In addition, the arrangement also facilitates the possession of current clients who could otherwise be tempted to find further brokerage.

also the advantage of partnerships in the payment of the order. The ability to accept ordering overflow orders means additional business that is reflected in multiple fees. Thanks to cooperation with several small companies on ŘEstimating volume orders creates brokerage efficiently more revenue flows that help to expand income generated by investors who are direct clients of the company.

In most nations, brokers who provide payment for the strategy of ordering of orders with other companies must reveal this to their clients. This allows these clients to find out whether they are satisfied with this arrangement or whether they need to find brokerage that will process transactions internally. If you do not disclose this type of publication, this may lead to exerting fines and possibly cause mediation to be able to carry out trades in some markets for a certain period of time, situations that can quickly balance any income obtained from the use of the order flow.