hard · Market Microstructure adverse-selection
A retail broker receives PFOF of $0.20 per 100 shares. If they route a 500 share market buy order to a wholesaler who fills at 50.04 when the exchange ask is 50.05, what is the total economic benefit to the broker and client combined relative to an exchange execution?
- $1.00
- $6.00
- $5.00
- $0.21
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