[bidirectional]

How? No offence but it just sounds like conspiratorial nonsense based on some scary sounding terms.

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.

[noodles_nomore]

The book Flash Boys deals with this. It's a long time since I read it, but IIRC brokers need to split large orders and route them to different exchanges to get the best price (which is required under 'best-effort execution'). These orders will hit the exchanges at different times giving enough time for HFT to observe them at one exchange and front-run them at the other.

[unmole]

> The book Flash Boys

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.

[sonotathrowaway]

Most large orders won’t be retail traders though.

[unmole]

> No offence but it just sounds like conspiratorial nonsense based on some scary sounding terms.

It's exactly that.