FCM payment for order flow

Neilsome

Neilsome

I recently opened an account at Dorman (through an IB) and am using Rithmic to trade. The application contained a page on how Dorman can sell my orders to other market-makers and get $$$ in return.

I thought that only happened for stocks (SMART orders) and Futures contracts orders (via Rithmic) go directly to Globex etc. Is this assumption incorrect?

Thanks in advance!
 
Neilsome said:
I recently opened an account at Dorman (through an IB) and am using Rithmic to trade. The application contained a page on how Dorman can sell my orders to other market-makers and get $$$ in return.

I thought that only happened for stocks (SMART orders) and Futures contracts orders (via Rithmic) go directly to Globex etc. Is this assumption incorrect?

Thanks in advance!
More...

Neilsome - you are correct that payment for order flow is primarily for equities and equity options (internalization and payment for order flow). Currently, there are no previsions for payment for order flow in futures. Not sure why FCM's continue to have this language in their agreements.

You are also correct that if you submit an order (via any ISV not just Rithmic) the order has to be sent to the exchange. The only case this is not true is where it is disclosed and a firm simulates advanced orders either on your local machine (like Ninja) or server side like other firms.
 
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