Payment for order flow
Brokers being paid to send customer orders to a market maker. Why trades are free and why spreads matter.
A definition says what a thing is; it never says whether it fits you. The guides explain how it works and name the professional who confirms it for a particular person. The No Advice Disclosure.
Words beside it
- Cash flow statement
Where a company's cash actually came from and went during a period. Harder to fake than profit.
- Discounted cash flow (DCF)
Valuing something by its future cash, discounted to today. Two guesses do most of the work.
- Free cash flow
Cash from operations minus what a company spends on equipment and buildings. What is left for owners.
- Limit order
An order that executes only at a specified price or better. The price is certain, the fill is not.
- Market order
An order to buy or sell immediately at the best available price. Fast, but the price is not guaranteed.
- Stop order
An order that becomes a market order once a price is hit. Not a guaranteed price.
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