Market Makers Paid $1.004 Billion for US Options Order Flow…

Robinhood paid the Securities and Exchange Commission $65 million in December 2020 to settle charges that it had misled customers about how it made money from payment for order flow and failed to meet its best-execution obligations. Less than six years later, the economics behind that controversy have become one of the biggest revenue engines in U.S. retail brokerage. U.S. brokers received $1.004 billion in options payment for order flow in Q2 2026, according to a Best Execution aggregation of public SEC Rule 606 filings published by Global Trading. The total increased 23.6% from Q1. Annualized at the same quarterly pace, market makers would pay brokers just over $4 billion a year for options orders alone. The SEC’s Rule 606 framework requires brokers to disclose where they route customer orders and payments received from execution venues. FINRA says those reports are intended partly to expose potential conflicts between routing economics and brokers’ obligation to obtain appropriate execution for customers.

Robinhood’s Options Business Is Now Bigger Than Equities and Crypto Combined

Robinhood’s Q2 numbers show how central options have become to the brokerage model. The company generated $342 million of options revenue, up 29% year over year, during the three months ended June 30. Options therefore accounted for roughly 44% of Robinhood’s $776 million in transaction-based revenue. That single product line generated more than Robinhood’s equities and cryptocurrency businesses combined. Equities produced $129 million of transaction revenue and crypto produced $100 million, for a combined $229 million. Event contracts contributed another $156 million. Options trading activity also reached a new high for the company, with customers trading 774 million contracts, up 50% year over year. The contrast with 2020 is difficult to miss. The SEC’s case against Robinhood centered on disclosures around PFOF, including statements about how the company generated revenue, as well as whether customers received sufficiently good execution. Robinhood settled without admitting or denying the SEC’s findings and paid the $65 million penalty on December 17, 2020.

Schwab Collected $434 Million From Options Order Flow

Robinhood is not alone. Charles Schwab reported $434 million of options order-flow revenue in Q2, a 62% increase from $268 million a year earlier. Equity order-flow revenue was $190 million, taking Schwab’s total order-flow revenue to $624 million for the quarter. Webull’s latest results point in the same direction. Its options revenue reached $88.4 million, up roughly 57% from $56.2 million a year earlier, while options contract volume jumped 68% to 213 million. Options were again its largest disclosed trading-revenue category. Those broker figures must not be added to the $1.004 billion industry PFOF total. The figures come from different reporting categories and overlap with the same underlying order-flow economics. Schwab, for example, separately identifies its $434 million as options order-flow revenue, while Robinhood and Webull report product-level options revenue under their own accounting presentations. They are useful for showing how important options are to each brokerage, not for constructing a second industry total.

PFOF Has Become Embedded in Retail Brokerage Economics

Payment for order flow remains a conflict regulators expect brokers to manage rather than a free pass on execution quality. FINRA’s 2026 oversight report specifically tells firms to review how PFOF affects routing decisions and stresses that brokers cannot transfer away their best-execution obligations. It also requires accurate disclosure of payments, rebates and routing relationships in Rule 606 reports. But the scale of the Q2 numbers shows how far the business has moved since Robinhood’s 2020 settlement. For Robinhood, options now generate more transaction revenue than equities and crypto combined. For Schwab, options order-flow revenue rose 62%. For Webull, options revenue rose 57%. The regulatory argument around PFOF never disappeared. The revenue attached to it became much larger.