Equity Flow — Disrupting the Payment for Order Flow Market
Payment for order flow, a phrase that has recently spiked in discussion from all types of investors and traders. The SEC has even had their fair share of news related events around the topic. So what is it you might ask?
Payment for order flow ( PFOF )
What is payment for order flow? Payment for order flow is a form of compensation that a brokerage firm receives for directing orders. Order flow is highly valuable when it can be seen in real time with no delays. There is a bit of a difference from institutional payment for order flow and retail payment for order flow. Institutions usually get the order flow directly from a brokerage or exchange by partnering privately with them. This lowers costs dramatically, and offers many benefits to the latency. A big part is that they can also execute orders on behalf of the broker’s clients in their partnership. This allows the brokerage to have a great execution for their customers when placing stock and option orders. This is similar to order flow platforms as it allows an investor or trader to view and analyze a massive amount of orders that are being executed in real time. Investors and traders usually call it “trading blindly” when someone makes trades without strong technical analysis knowledge. If there are a lot of calls being bought above or on the asking price, then usually the underlying is bullish as an investor is creating a bullish position. With that being said, nothing is guaranteed or accurate of course. All investments carry risk, and should be done within the investors comfortable personal risk tolerance.
How can I use payment for order flow?
Using and analyzing order flow can be very complicated, and should be done with the proper due diligence and knowledge of the financial markets. It is both helpful to new and veteran traders as it helps understand where “smart money” and “dumb money” is moving. A recent platform known as Equity Flow has launched as a massive competitor to existing order flow sites. It inherits all of the features of the existing platforms, plus many more unique features. Features include; non delayed real-time order flow, dark pools and large order block trades, historical option flow analytics, SMS alerts for large trades. The site claims to have a max of 60 seconds for all stock tickers, and a max of 10 seconds of delay for SPY and QQQ. The site is a subscription based platform in which you can view all of the data live on the platform for a recurring monthly cost of $10. There is also a yearly plan for around 20% off. They are majorly disputing the existing order flow market as they are now the most site to offer extreme competitive pricing. If you are an active investor or trader, then I would personally recommend finding out how order flow can help you gain more of an edge as a trader.