> The exchange could nullify all trades in a certain period of time, which would completely wipe out your upside potential.

This is the most important thing: In every single "flash crash", the exchanges have retroactively canceled trades, in a rather arbitrary manner (e.g., "every trade between 16:30 and 16:38 is null and void"). There is some underlying justification, but it is also arbitrary (e.g., "anything below 3% of the price when the flash crash started", with no specific justification for the 3% number, or a well defined methodology for the time of the crash).

That could easily turn a +$100K profit into a -$500K profit, depending on circumstance.