[ChainOfFools]

I have a family acquaintance who works at a fairly prominent hft shop in nyc. He's rather circumspect when I ask him about details of his job, which doesn't directly relate to trading but I get the impression he has to know quite a bit about how the various trade plans work, since he is deeply involved in maintaining the highly bespoke infra they run on.

After a few beers he'll sometimes start bringing up "customers purchasing order flow" from them, which apparently accounts for a significant part of their revenue. He's also indicated that this is not a practice unique to their shop but is fairly commonplace among companies that have highly advantageous (next-building or same-floor/dc equivalent latency) transport to various exchanges.

I assume, but am hesitant to ask directly, that this activity cannot actually be what it sounds like, but now I don't know.

[jarsin]

Payment for order flow is why we have commision free trading. So basically all brokers have these deals.

The SEC announced plans to end it, but my guess is they will be bought off so only the most powerful can participate.

Citadel and Jane Street are basically at either end off almost every trade making billions off fractions of pennies.