Summary Overall, there is no evidence that PFOF harms price execution. In the end, we find that our price differences are due to different brokers getting different execution prices for the exact same trade at the same venue. Indeed, wholesalers, unlike exchanges, are not required to treat clients equally.
i never thought pfof itself harms execution. however, the mere fact that order flow is routed to only a few dealers, can easily affect the price of the stock at any given time , as they move the b/a around to advantage themselves is this ever even discussed ?
Not in my case and I tested it thoroughly. There might be one exception. If you are buying/selling stocks over $1 that have a 1 penny spread and you are buying/selling only 100 shares at a time then it should be difficult for the PFOF guys to take advantage of you. But this isn't a typical case for most of us.
The actual trading cost-per-trade is the sum of commission, exchange fees, spread, and slippage. Some "costs" get disguised among those. "Everybody along the way" needs to "get paid" to stay in business... and they all do. So... costs can overwhelm attempts at scalping... should playing for bigger moves.
Plus exchange fees, SEC fees, etc. I'm well aware of all the costs as I've been paying them! lol. And I took every bit of that into account in my testing.