Payment for order flow is an example of the incentives of retail traders, retail brokers and HFT market makers aligning. The market makers are able (and obligated) to improve prices because they have paid to receive flow they are almost certain is not toxic. Meanwhile they charge the likes of hedge funds higher prices as they can't guarantee the reasoning behind their trades (i.e. they may be about to have their faces ripped off).
The HFT firm takes their (tightened) fee for making a market, kicks some back to the retail broker, and because the broker earns money that way, they offer commission-free trading to the retail trader.
Is a hopelessly bad book. It's a thinly disguised advertisement for IEX.
> front-run
I do not think it means what you think it means.
It's exactly that.
Dark pools reduce volatility, it’s just liquidity outside of the normal order book. Regular people don’t need dark pools because they aren’t slinging $500M block trades. Furthermore, trades can happen off-exchange without dark pools.
It sounds like you aren’t even an amateur, let alone an expert, no offense.
I know what those words mean individually. But put together like that they make no sense.
