To read more about our decision to eliminate Payment for Order Flow and change the way we route orders please check our announcement here.
What is Payment for Order Flow?
We suggest reading more here, but the short version is that most online brokers in the US get paid by market makers to send your trades to them -- and that practice is called Payment for Order Flow. Oftentimes, it's harmless or even beneficial to investors, but most recently it has been abused by some of our competitors -- and it is nearly impossible to know if you are getting a good deal or not, so we're stopping the practice.
Why are you eliminating it?
We hold ourselves to a higher standard of transparency and alignment, and want all of our Members to feel comfortable knowing how we make money.
How is your order routing changing?
Instead of routing order to market makers, we will instead be routing our orders to exchanges.
Will this impact the price I pay for stocks?
No. As a FINRA-registered broker-dealer we are required to provide you the best execution we can.
How else do you make money?
Tipping replaces the revenue we would otherwise receive via Payment for Order Flow (PFOF). In addition to tipping, we also make money via interest on cash balances, securities lending, and in the future we may introduce paid subscriptions. You can learn more here.
We are also launching a new feature that allows our Members to add an optional tip after placing any order. Routing our orders to the exchanges is more expensive, and therefore we’re turning what used to be a revenue stream (PFOF) into a cost center -- and we are hoping that will be offset by the optional tipping feature
How does tipping work?
After you submit an order, you'll be given an opportunity to tip. If you choose to tip, you'll hit the "+" sign until you reach the tip amount you want, then submit the tip. The tip amount will be deducted against your buying power until and if the order is executed and will be returned to buying power if the order is canceled or rejected.
Is tipping required?
Nope! And tipping is totally separate from your order, so it won't change anything about how your order is executed.
How much should I tip?
Whether or not you tip, and how much, is totally up to you. Our minimum tip varies by the dollar value of your order and the maximum tip we accept is 5% of your order amount.
Can I change my tip amount?
Once a tip is submitted with an order, it cannot be changed, though the order itself can still be canceled which would cancel the tip, as well.
Is tipping considered a commission or sales charge for cost basis reporting?
No. Tipping is a separate charge not connected to the execution of an order.
Why did you launch tipping?
The short version: because we think it's a better, more transparent, more aligned way to make money (than payment for order flow, which we've stopped accepting)! Read more about that here
Tipping Terms & Conditions
- Adding a tip to an order on Public is fully optional and is a charge to the Member’s account separate from the execution of orders.
- The customer’s decision to tip or not to tip does not impact the order routing, execution, or any other aspect of the order.
- Tips are submitted as a dollar amount associated with a given order and are deducted from buying power until the order is executed or canceled/rejected.
- In the event of an executed order, the tip will remain deducted from buying power and will be held in the customer’s account as “pending tips”. Pending tips will be deducted from the member’s account on a regular basis.
- In the event of a canceled or rejected order, the tip will be credited back to the buying power of the account.
- If there’s sufficient buying power to execute the transaction, but not to fulfill the tip amount, we will still execute the transaction, but will take the tip only to the amount of available buying power.
- Once a tip is submitted with an order, it cannot be changed, though the order itself can still be canceled which would cancel the tip, as well.
- Tips are capped at 5% of the projected transaction amount.
- The tip amount increments are set by the app and tips cannot be made in amounts that don’t conform to the pre-set increments.
- The tipping user interface may have a default amount. The default is neither a suggested amount nor a required amount and can be skipped with the "skip" button.
- Tips do not constitute a commission for trading.
- Tips are a charge received by Open to the Public Investing Inc and constitute revenue to the firm. They are not received by nor constitute a gift to any person, principal, proprietor, employee, agent or representative of another person
- Tip charges will not appear on trade confirms
- All tipping terms and conditions are subject to change without notice.