[kasey_junk]

Largely because the entirety of latency arb has to do with taking advantage of price differences between exchanges. How those differences are created is largely immaterial.

As long as you have multiple exchanges that are not perfectly syncd (a distributed systems problem!) There will be time based arbitrage opportunities.

[rrrrsss99]

Not exactly in all products. US equities exchanges have to comply with the nbbo (national best bid offer), so they're required to forward an order to the exchange with the best price. This isn't true for futures, but there aren't any fungible futures in the US. This means that latency arb in US equities isn't true arbitrage. If you see a price level get sweeped at one exchange, you may guess that the others will follow, but it's no guarantee and most sophisticated traders who trade the volume to do this will trade in a dark pool or block trade, so the opportunities are close to non existent. The intent for equities market making is to trade retail orders with the assumption that they they're placed with no knowledge of a true price and won't move the market. The true arb opportunities today are reserved to minis vs futures or cross exchange futures vs indexes

[tptacek]

I think the point Kasey is hinting at is that the functionality you claim RegNMS requires exchanges to implement is not, due to the CAP theorem, actually possible to do reliably.