Fidelity does use payment for order flow, and has for years

Payment for order flow (PFOF) is money that market makers and trading venues pay brokers like Fidelity when those brokers send customer orders to them. Fidelity receives these payments. The firm does not publicly commit to stopping the practice, and there is no indication it will in 2026.

When you place a stock trade at Fidelity, your order does not go directly to an exchange. Instead, Fidelity routes it to a market maker or trading venue—often Citadel Securities, Virtu Financial, or others—who fills your order and pays Fidelity a small amount per share. This is standard across the retail brokerage industry. Fidelity discloses these payments in its quarterly reports and on its website, but the practice remains unchanged.

The key question most investors have is whether PFOF affects the price you get. Fidelity argues it does not, because brokers are required by law to route orders to the venue that offers the best execution price available at that moment. In theory, the payment Fidelity receives is separate from the price you receive. In practice, this remains contested among regulators and researchers.

Key Takeaways

  • Fidelity receives payment for order flow from market makers and trading venues when customer orders are routed to them.
  • These payments are disclosed in Fidelity's quarterly SEC filings and regulatory documents, not hidden from view.
  • Brokers are legally required to route orders to the venue offering the best execution price, regardless of PFOF payments received.
  • The SEC has proposed rules to restrict or ban PFOF, but no final rule has been adopted as of 2026.

How Fidelity's order routing actually works

When you submit a buy or sell order for a stock through Fidelity's website or app, the order enters Fidelity's systems. Fidelity then decides where to send that order—to which market maker, exchange, or alternative trading system. This decision is made by Fidelity's routing logic, which considers execution quality, speed, and price improvement.

Fidelity routes retail orders to venues including Citadel Securities, Virtu Financial, Two Sigma Securities, and others. These market makers profit by buying from sellers and selling to buyers at slightly different prices. They also pay brokers like Fidelity for the right to fill those orders, because the volume is valuable to them.

The payment Fidelity receives ranges from a fraction of a cent to a few cents per share, depending on the stock and the market maker. On a 100-share order, this might be 50 cents to a few dollars. Fidelity does not pass this money to you; it keeps it as revenue. This is how Fidelity can offer commission-free stock trading—the PFOF payments help offset the cost of running the platform.

What the SEC has proposed about payment for order flow

The Securities and Exchange Commission has been skeptical of PFOF for years. In 2021, SEC Chair Gary Gensler called for a ban or strict limitation on the practice. In 2023, the SEC proposed a rule that would have restricted PFOF significantly, requiring brokers to route orders to public exchanges rather than market makers in most cases.

That proposed rule faced industry pushback and has not been finalized. As of early 2026, the SEC has not adopted a final rule banning or severely restricting PFOF. Fidelity and other brokers continue the practice under current regulations, which require only that they route orders to the venue offering the best execution price at that moment.

If the SEC does eventually ban PFOF, Fidelity would need to change how it routes orders and how it generates revenue from retail trading. The firm would likely pass some costs to customers or reduce services. However, this remains a regulatory possibility, not a certainty, and no timeline for a final rule exists.

Where Fidelity discloses its payment for order flow

Fidelity publishes information about PFOF in two main places. First, in its quarterly Form 10-Q and annual Form 10-K filings with the SEC, the company reports total PFOF revenue by asset class (stocks, options, fixed income). These documents are public and available on the SEC's EDGAR database.

Second, Fidelity publishes a quarterly report on order routing and execution quality on its website. This report breaks down where Fidelity routes orders, which venues receive the most volume, and whether Fidelity achieved price improvement for customers. The report is detailed but technical; most retail investors do not read it.

You can also request Fidelity's order routing disclosure directly. Under SEC Rule 10b-1, brokers must provide this information to customers upon request. Fidelity will send you a document showing where your orders were routed and what execution quality you received.

How payment for order flow compares to other brokers

Fidelity is not alone in using PFOF. Nearly every retail broker in the United States—Charles Schwab, E-Trade, Interactive Brokers, Robinhood, Webull—uses it. The practice is standard because it allows brokers to offer commission-free trading without charging customers directly.

Some brokers claim to route orders differently or to prioritize execution quality over PFOF revenue. Interactive Brokers, for example, allows customers to choose between PFOF-based routing and routing to public exchanges (which may result in slower execution). However, most retail brokers, including Fidelity, do not offer this choice.

The amount of PFOF revenue varies by broker and by market conditions. During volatile periods, market makers pay more for order flow because the risk is higher. During calm periods, payments are lower. Fidelity's PFOF revenue is substantial—the firm reported over $1 billion in PFOF revenue in recent years—but this is spread across millions of customer orders.

What this means for your trading costs and execution

The central question is whether PFOF harms you as a customer. Fidelity argues it does not, because the firm is required to route your order to the venue offering the best execution price. If a market maker is paying Fidelity for order flow but offering a worse price than an exchange, Fidelity cannot legally route to that market maker.

However, "best execution" is measured in milliseconds and fractions of a cent. In practice, the difference between the best available price and the price you receive is often invisible to you. Researchers have found that PFOF may result in slightly worse prices for retail investors compared to institutional investors, though the effect is small on individual trades.

For most retail investors, the benefit of commission-free trading outweighs the potential cost of PFOF. If Fidelity were forced to stop using PFOF, the firm would likely charge commissions again or reduce the services it offers. The trade-off is between a small, invisible cost per trade and a visible, direct cost per trade.

Frequently Asked Questions

Does Fidelity make more money from PFOF than from commissions?

Fidelity stopped charging commissions on stock trades in 2019. PFOF is now a major source of revenue from retail trading. The firm does not break out PFOF revenue separately in its earnings reports, so the exact amount is not public. However, PFOF revenue is substantial enough that Fidelity can afford to offer commission-free trading and still be profitable.

Can I opt out of payment for order flow at Fidelity?

No. Fidelity does not offer customers the option to opt out of PFOF routing. All retail orders are routed through Fidelity's standard process, which prioritizes PFOF-paying venues alongside execution quality. If you want to avoid PFOF entirely, you would need to use a broker that does not use it, though few exist in the retail space.

Does PFOF mean Fidelity is selling my data?

No. PFOF is not about selling customer data. It is about selling order flow—the right to fill customer orders. Market makers do not receive your personal information; they only see the order itself (buy or sell, quantity, stock symbol). Your account details and identity remain private.

Will Fidelity stop using PFOF if the SEC bans it?

Yes. If the SEC adopts a final rule banning PFOF, Fidelity would have to comply. The firm would then need to find another way to generate revenue from retail trading, likely through commissions, subscription fees, or reduced services. However, no final ban is in place as of 2026.