The market makers are providing a service of order fulfillment and lower commissions and fees for thier customers. If your problem is stop loss hunting then why don't you change your stop loss levels to something that can handle the normal trading whipsaws? You need to do your own research for finding the security that trades at the price and the volatility levels that suit your needs and do the proper position sizing and risk management.
So I guess a possible "countermeasure" to this is if we place hidden orders? Would MM's who pay for order flows still see hidden orders? Would you know? Of course the downside to hidden orders is that they might not get executed so if they are not as effective as far as cutting losses is concerned.
Most Option orders are sent to a designated Market maker (DMM). They decide if they want to trade with you, post the order and what option exchange to place it on or print it. If you have the choice to choose an option exchange, those orders are still typically sent to an DMM. Placing hidden orders in options is not something I would do. An Iceberg order maybe, for very large orders, in less liquid symbols. If these are liquid symbols, many MM want to trade size as long as they have "edge". They would rather do 2000 than 2.
What I mean by hidden orders is more for trading stocks and other assets. I know hidden orders don't help much in terms executions for options.
If I wanted to hide my order, I would rather use a DARK pool. I have customers trading low volume symbols that prefer Dark pools and high volume larger accounts that prefer Dark pools to getting in and out of larger orders. I have no opinion on when DARK is better. I would not hide equity orders on Lite ECN/Exchanges. Our customers sending limit orders to add liquidity do not get paid on ARCA or NASDAQ for adding liquidity. You miss out on a credit of $0.002/Share.
But at least they won't see your stops? This is one of the concerns that were raised in that MM's are able to deduce possible stops and tp targets to their advantage when they see orders on the books especially when they pay for orderflow. Since dark pools are not accessible to the investing public according to this article: https://www.investopedia.com/articles/markets/050614/introduction-dark-pools.asp, then the only way for retail traders to not get stop-hunted or shaken out of their positions is really through hidden orders.
Our customers can access dark pools but dark pools do not take stop orders and a stop order is not hidden after triggered. You can’t combine these all.