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Front running is illegal. Its payment for order flow which is earning off the spread while also keep it tight and liquidity in the market.

• DSingularity 6y ago
  So... basically front running ?? That’s what it seems like you are describing. They make money when they manage to get ahead and provide the liquidity needed to fill the orders. What am I missing?
  • seabird 6y ago
    It is not front running, and can only be conflated with it if you don't know what front running actually is, don't know what PFOF actually is, or both. Firms that pay for order flow are paying to be the counterparty to transactions that have razor-thin arbitrage opportunities. They are not placing orders with advance knowledge of upcoming orders; they are reacting extremely quickly to fraction-of-a-cent spreads in the price of a security and pocketing the difference.
  • hellbannedguy 6y ago
    Nothing. I can’t believe it’s legal. And yes, I know about the free trading it has supposedly provided. Maybe free trades are dangerous to to most retail traders?
  • porb121 6y ago
    a market maker by law has to provide prices better than offered by the current market. frontrunning does not do that.
  • ubercow13 6y ago
    So you would rather your liquidity was provided by someone slower and more expensive?