Education

The Economics of PFOF: Who Benefits, Who Pays

PFOF creates a clear economic structure: Citadel profits, brokers earn ancillary revenue, retail investors pay through inferior execution.

Welfare Analysis

In economic welfare terms, PFOF transfers surplus from retail investors to wholesale market makers through information asymmetry and market power rather than value creation — approximately $1-5 billion annually.

PFOF economicspayment for order flow welfarePFOF who pays

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