How Discount Brokerages Make Money
This is outside of my usual software-oriented beat, but sometimes people are wrong on the Internet. Most recently, people have been wrong about payment for order flow, an esoteric topic in the investing industry which seems vaguely unsavory to Hacker News commenters, Michael Lewis , etc.
Explaining why payment for order flow isn’t a big deal requires a more in-depth discussion of discount brokerages. All stats below are as of 2018; citations for the annual reports are at the bottom.