Citadel, Knight and other wholesalers are also known for calling on TD Ameritrade on its home turf of Omaha, Neb., Mr. Nagy said. "You would go to a steak house literally as a weekly occurrence," he said. "Since I've left Ameritrade, I've lost 15 pounds."

The wholesalers profit by funneling the retail orders through their internal computers to match them against trades from professional investors. In a review in 2010, the Securities and Exchange Commission found that, of eight large retail brokerages, nearly 100% of their customer market orders were routed to market makers, and weren't sent directly to the market. Those orders that aren't matched are sent on to exchanges or other trading sites.

A technology glitch and resulting $440 million trading loss at Knight on Wednesday prompted several retail brokerages, including E*Trade Financial Corp. (ETFC), as well as big money managers, including Fidelity Investments and Vanguard Group Inc., to funnel customer trades away from Knight Thursday and Friday, opening the door for its main wholesaling rivals to pick up share.