Binance just pulled back the curtain on how it plans to make money from stock trading, and the numbers are worth paying attention to. A legal document published Tuesday reveals the exchange will collect 50% of Alpaca’s payment-for-order-flow (PFOF) fees and 65% of the remaining profit from user stock lending after interest is paid out to users.
How the deal actually works
Alpaca, a brokerage infrastructure API provider registered with the SEC and FINRA, serves as the clearing broker and custodian for Binance’s stock trading operations. Binance’s entity Nest Trading Limited acts as the introducing broker, essentially funneling users to Alpaca’s rails.
The arrangement gives eligible global users access to over 7,000 US-listed stocks and ETFs. Trading is available 24 hours a day, five days a week, with a minimum entry point of just $5. Platform fees start at roughly $0.35 per trade.
Binance has also taken a minority equity stake in Alpaca as part of this partnership.
