[akra]

I always had questions about the liquidity on offer though seeing participants flee the market in black swan events. HFT liquidity could be illusionary - its only there when its not quite required similar to how the bank "only offers you a loan when you don't need one". Of course this is exactly the point when liquidity is required; normally there's sufficient liquidity in normal times from market participants. Its easy to offer liquidity in normal times; harder to do so when no one else wants to offer it.

[wellactually]

Offering liquidity is not equivalent to offering free money. The offer comes at a cost.

[kortilla]

> normally there's sufficient liquidity in normal times from market participants.

Not really. The spreads were terrible before HFT market making.