In the past, I read about large institutional block trades not going to the exchanges. For example if MF A wants to sell $100M worth of a certain stock to MF B, the deal is transacted directly between the two parties. I assume they already agree on a price, but I don't know if this price and the trade are reported publicly.
In the case mentioned in this thread, a wholesaler is acting as the other side of the many small retail trades, without going to the exchange. I assume that the price for the trade is taken as the same quoted bid/ask that is posted by the exchanges at the time of the trade. Else, it would be a cheat to the retail investors.
I guess if the trades are not going through an exchange, they will not be included in that exchange trading volume of the day. If true, this means that the total trading volume is a lot higher than we read about.
Of course, the wholesalers are not doing this to be nice, but to make money. But if they are selling/buying at the same price as being conducted publicly on the exchanges, then what is the harm? I don't know enough about this, and am curious to learn more.
I found a relevant article by the SEC on this, and am still reading it.
https://www.sec.gov/files/staff-report-equity-options-market-struction-conditions-early-2021.pdf