Your broker or the wholesaler both have a choice:<p>1) match the order with the NBBO.  
2) send the order to the exchange.<p>If your limit is better than the NBBO, then they are required by the law to price improve it.  Further, the nature of their agreements with your broker are such that they are required to maintain a price improvement level (that should be better than NBBO compliance).  That is, incidentally also largely the requirement the exchanges operate under as well.<p>A limit order doesn&#x27;t have anything to do with the existence or non-existence of market orders, it has to do with your <i>limit</i> and the NBBO.  The way they make money is not by changing the market against your interests, but instead booking the spread (and in fact the reason they like retail order flow is that it is naturally uncorrelated so the spread is more even).<p>The customer does in fact know that this is happening as it is a regulatory requirement that they disclose it.<p>I suspect that lots of whole sellers would be happy to kick back profits, if the retail customer was also on the hook to back the losses.  Instead, they aren&#x27;t and they get heavily discounted (to the point that it is now free to trade) trading costs instead.