[harryh]

When someone buys liquidity, they don't do so to close their order 500ns faster. They do it to ensure they can trade at the current market price because they don't want to take the risk that the market will move away from them while waiting for a counter-party to trade with.

Those that are comfortable taking this risk can simply issue a LIMIT order instead of a MARKET order.

[HWR_14]

So your contention is that HFTs make prices more stable? That they somehow assume risk and that justifies their profits. How would that work? I thought HFTers only got involved in between two parties when they knew they could make a profit. That's why HFTs don't have days when they lose money.

[harryh]

I thought HFTers only got involved in between two parties when they knew they could make a profit.

You thought wrong. While there are a variety of things that HFT firms do, most of it is market making.

https://en.wikipedia.org/wiki/Market_maker

[HWR_14]

Those market makers are known, formal and regulated. HFTs are none of those.

Well, I guess semi-regulated.

[harryh]

The big HFT firms are, in fact, well known.

https://medium.com/automation-generation/15-well-known-high-...

They're also regulated in various ways.

[kasey_junk]

In fact all of the nyse designated market makers are HFT firms.

https://www.nyse.com/markets/nyse/membership