Your Rights and Responsibilities as a Raymond James Client

Indirect Compensation for Order Flow

Some transactions, generally in equities and options, involve an indirect form of compensation to the firm. If transactions are directed to it, the firm receiving the directed order may reciprocate by giving other orders to the referring firm. This practice is somewhat common for listed orders directed to “third market” firms that execute trades at prices equivalent to or better than exchange quotes, as well as in the over-the-counter market. Similarly, firms may receive payment for order flow on some options transactions. The amounts vary substantially, but generally do not exceed $0.75 per contract. All market makers do not pay for option order flow and such payment is not generally relevant in making the decision as to where to send the transaction.

Raymond James & Associates will send trades to a particular broker/dealer or market center in order to receive best execution quality. As a result, we may receive compensation. It may also be possible that this practice has resulted in markets that are less efficient. The source and specific amount of any such compensation are available upon request.

Additionally, Raymond James & Associates is a market maker in a number of over-the-counter securities. As a result of these directed orders, trading profits or losses may be generated by Raymond James in stocks purchased by clients.

The information in this section also appears in the brochure entitled: “Your rights and responsibilities as a Raymond James client.”