I don&#x27;t see how taking on downside risk improves the wholesaler&#x27;s position (in fact, I think the rationalization is an even more degenerate case).<p>The fact still remains that the wholesaler has fabricated an order on the knowledge of a customer&#x27;s pending order, which affected the execution price of the customer&#x27;s order, before the customer could even know that it happened.<p>Even if the wholesaler sent their order to an exchange and still matched with their customer, it is still front-running, as the wholesaler is using knowledge of their customer&#x27;s order to, essentially, <i>eliminate all possible price improvements</i>.<p>So, what is being called a &quot;limit order&quot; is just code for &quot;we might just fill your order at your limit <i>[when there are no market orders]</i>, if we think we can make money off <i>[front-running]</i> your order with our own&quot;.<p>It would perhaps be acceptable if the wholesaler offered some kind of kick-back on any profits made, but that would need to be a different kind of order and I&#x27;m not aware of anywhere that does it.