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Hedge
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==== How does payment for order flow (PFOF) work? ==== [[File:B602fbe220078826478935ca2c6546edaf795ce.png]] # A customer places an order on Hedge, who routes it through its brokerage for execution. # Hedge then sends the order through its brokerage to a high-frequency trader (HFT) who will look for a better price off-exchange. If the HFT sees another order that is better than the on-exchange price, they'll purchase it and sell the asset back to the user for the difference. # The wholesaler is required by law to find the best execution but pays Hedge regardless of whether theyβre able to find one off-exchange. This allows Hedge to rebate a portion of the PFOF revenue back to their users, either way, thus improving their overall order execution.
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