[immibis]

What I was actually thinking about was the infamous Payment for Order Flow, where your broker doesn't actually send your orders to an exchange, but gets paid to send them to a giant HFT firm which can do whatever it wants with no oversight, including using the information that you are about to place an order to inform their algorithms which may result in them putting out a similar order before yours.

[jqmp]

FYI, this is false. These HFT firms are subject to the same regulation as other brokers, which is extensive. In particular, it's explicitly forbidden to front-run pending customer orders, or to share any information about them with the proprietary side of the firm. In my experience, these firms take these rules very seriously.