[MichaelGG]

This is not how it works. It's more like he sees you buy one gallon of milk at 399 then decides to go buy others. He has NO idea if you're going to buy it or not. He's taking a risk.

What your described is more like real front-running: A customer places an order, the evil broker sees it and goes out in front to buy for himself then gives the customer a lower price.

Your buddy in the Ferrari reliably making money requires him to be able to properly predict. AND you're missing the other side of the trade! The poor shopkeep that priced at 399 when you were OK paying 401. Why should he lose out?

HFT market makers solve this.