"This is their modus operandi," said independent trading and market structure consultant William Karsh, a former chief operating officer of rival electronic exchange Direct Edge. "They screw the wholesalers because they can. At the end of the day, the wholesalers have no choice but to use them - they are still a huge liquidity pool."
Quote from Bison42:
Anybody ever buy a used car? That's what trading on Nasdaq is like.
These guys aren't market makers. They are dealers. They have no responsibility. If a Buy and Sell order come in at the same time, they buy from the seller and sell to the buyer and keep the Vig.
They also trade thru limits if the contra side is not big enough to fill the limit order. After they are done buying enough small orders then they fill your limit order at the higher price.
