order flow

Order Flow

The directing of orders by a brokerage to different parties to be executed.

Notes:

For example, to fill orders for securities trading on an exchange such as the NYSE a brokerage has a number of different options. They may choose to direct the order to a regional exchange or a third market maker to be filled.

Sometimes, regional exchanges and third market makers will pay the brokerage a fee for order flow. The fee is likely only a cent or two a share but can add up on large orders.

See also: Agent, Broker, Dealer, Limit Order, Market Order, Order, Third Market Maker

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order flow

Aggregated small orders for securities sent to dealers by brokers. See also payment for order flow.