We show that off-exchange (wholesaler) executions provide significant trading cost savings
to retail investors. Despite industry concentration, three findings suggest that wholesalers do …

After the adoption of zero-commissions by major brokers, they increasingly route orders to
wholesale market makers to possibly earn payment for order flow given the loss of …

US retail brokers route order flow to wholesalers based on their past performance. Brokers
face a strategic choice over how often to reallocate order flow, how aggressively to reward or …

This paper uses regulatory data to assess the value of retail order flow in the German equity
market. To this end, we examine the performance of specialized retail market makers …

Traditionally, market makers compete on bid and ask prices to attract marketable orders,
facilitating price discovery and liquidity in markets. However, internalization mechanisms …

Results These RMMs trade frequently in a wide range of securities, maintain low inventories,
and generate significant risk-adjusted returns. For comparison, we also dissect the activity of …