Monthly regulatory filings collated by Bloomberg show “payment for order flow” earned US brokers $2.9bn in 2020. TD Ameritrade generated fees of $1.1bn between its broker-dealer and clearing divisions, while rival Robinhood grew fastest, earning fees of almost $700m. The lucrative practice allows brokers catering to amateur investors to earn substantial fees without charging a commission for bets on equities and options. It has shot into focus after chaotic trading ignited by users of Reddit’s r/WallStreetBets forum, leaving many small investors surprised to find that their trading was feeding another part of the financial machine.

https://www.ft.com/content/6651f34a-0d8d-4d68-bdf9-23b355f8c9db