[harryh]

It does seem like the fee being paid for order flow should be able to be captured by those making the orders in the form of further reduced spreads rather than by brokerage firms selling the flow. Though perhaps the issue is that with stocks regulated to trade in penny increments that's hard to do?

I am uncertain.

[kasey_junk]

The spreads can't reduce much more than they are now due to the regulation issue.

The order makers do see part of that rebate in the lowering of the fees they explicitly pay to trade.

Robinhood is a particularly good example of this. They seem to be financing a no-fee model based purely on selling the order flow.