Largest brokers saw a 59% increase in payments from trading firms for order flow

Payments for retail broker order flow continued to grow at a fast clip during the second quarter of 2020 as markets continued to digest the Covid-19 financial and health crisis, according to data compiled by The Block Research. 

Payment for order flow (PFOF) is one of the main ways in which large brokers — ranging from TDAmeritrade to Robinhood — make money. And from the first quarter of 2020 to the second quarter, such payments surged, according to recently released filings. At the beginning of 2020, brokers were mandated to share more granular information about their order routing practices, which for the first time painted a picture of how much brokers profit from offloading their orders to Wall Street's high-speed trading firms and market makers.