Robinhood's Documented PFOF from Citadel
The most well-documented PFOF figures come from SEC enforcement actions and public filings. During 2020, according to SEC records, Citadel Securities paid Robinhood approximately $1.5 billion in PFOF — or approximately $1.5 billion paid to one broker by one market maker in a single year. This figure, drawn from public SEC documents, illustrates the extraordinary scale of the PFOF system.
Rule 606 Disclosures
SEC Rule 606 requires brokers to file quarterly reports disclosing PFOF received and order routing statistics. These reports are publicly available but can be difficult to navigate. Each report discloses the per-share or per-contract PFOF rates received from different market makers, along with execution quality statistics. Investors who want to understand how their specific broker is compensated can access these filings.
The Math: Why PFOF Is Lucrative
The PFOF system is financially rational for both parties. If Citadel Securities receives a retail order, captures a spread of (say) $0.03 per share, and pays Robinhood $0.01 per share in PFOF, Citadel retains a $0.02 margin on the trade. At hundreds of millions of trades per day, this margin aggregates to enormous revenues. The $1.5 billion paid to Robinhood in 2020 was profitable because the revenue from executing those orders exceeded the PFOF cost.
What Retail Investors Don't See
The PFOF amounts disclosed in Rule 606 filings represent payments from market makers to brokers. Retail investors do not receive any share of these payments. The payments are funded, ultimately, from execution margins on retail investors' own trades. In The Ethics Reporter's view, this transfer of value from retail investors to brokers and market makers deserves ongoing public scrutiny.