[elecengin]

Unfortunately, a traditional US retail investor does not have the flexibility described here. Lewis describes Electronic Market Makers (EMMs) and Payment For Order Flow (PFOF) - under these models, your order never actually reaches a market. It is routed directly to a market making firm (usually Citadel, Knight, Pershing, or Getco) that fills the order immediately if the price is marketable and then trades out of the position later. This indirection makes the whole discussion around your position in the order book somewhat moot.

It is important to recognize that under Reg NMS the market making firm must fill you at the prevailing market price (the NBBO). While they technically could sweep the market to move the market price before filling, this almost never happens for a retail order since they are so small.

For this reason, the whole discussion around HFT "front-running" isn't very topical to the retail investor buying individual stocks and it barely affects the cost of execution of funds ($0.43 per $10,000 notional value traded according to [1])

In summary, the people fanning this flame are not trying to protect retail investors... If they were, they would focus on the larger scams on the street (exhorbitant management fees for actively managed funds, for example)

[1] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1928510

[thatthatis]

It saddens me that people lump Market Making and HFT together. Over the past 100 years, the bid-ask spread has fairly steadily decreased due to technology and this fact in isolation is uniformly a good thing for retail investors.

http://www.cxoadvisory.com/5737/big-ideas/trading-frictions-...

Other HFT methods are less clearly on net socially good.