[kasey_junk]

That is not at all true. It is perfectly legal and valid to place quotes at a price that you expect is valid and change them once interest is detected. This is a standard market dynamic and one that makes the markets work.

Your analogy is not all how HFT works. A better analogy would be a string of gas stations going down the highway. A tanker truck comes to the first one and buys all it's gas. Then the second one, and then the third. The manager at the third station calls the fourth and tells them to raise their prices. How is it scummy to do that, but not to buy up all the gas at what is clearly a too low price?

[VikingCoder]

> This is a standard market dynamic and one that makes the markets work.

I don't believe this is necessary to make markets work.

[harryh]

Forgot your mumbo jumbo evidence & logical reasoning! I believe what I believe and you can't stop me!

stomps foot

[VikingCoder]

Please don't be so rude, it doesn't add anything to the conversation.

There are many markets where you list a product for a price, and are legally bound to sell them at that price.

Those markets function, proving that withdrawing quotes is not necessary to make markets work.

[harryh]

What markets are those? I can think of no markets in which you're not allowed to change the price of whatever goods you're selling.

[VikingCoder]

Best Buy runs a flier with a price. You walk in, and Best Buy tells you they're not selling that product at that price... but they do have it in inventory at a higher price.

You drive up to a gas station, listing one price on its sign. By the time you pay, they've changed the price.

You see a house for sale. You make an offer, at that exact amount. There are no higher competing offers, but they want to back out.

You have legal recourse in each of those situations.

[harryh]

1) That's not because Best Buy isn't allowed to change prices. There's even fine print on their marketing that says the prices on the flyer are marketing only and may or may not match pricing when you get to the store. They just choose not to most of the time for marketing reasons.

2) Actually, at least in New York there are no regulations that discuss the large roadsign pricing signs at gas stations. The law just says the price on the pump must match what you get charged. If they change the price at the pump but get behind on updating their big sign you are SOL.

3) People back out of selling houses all the time.

And for all of these it's worth pointing out that what we're really arguing about is time scale. No one would argue that the gas station (for example) wasn't allowed to sell gas for a different price today than it charged yesterday right?

Bid and ask prices for securities just change prices faster than what we're used to for retail products.

To really expand the scope of this discussion it's worth noting that time scales for retail product price changes are actually shrinking. Walmart has experimented with electronic labels in stores that allow them to change prices in real time. Uber changes prices in real time based on demand. It's interesting to watch consumer reaction to these new trends.