Yes, in the case where external pricing information is released a short time before the window closes, collocated HFT will be able to win. But I'm not sure it w

Yes, in the case where external pricing information is released a short time before the window closes, collocated HFT will be able to win. But I'm not sure it would be any worse than the current situation. Also with batch auctions there can be multiple collocation points in different cities. But when the external information is released earlier in the window (which should be just as likely if random, and maybe even mandated for press releases to occur at the beginning of the window) the playing field between collocated HFT and smaller traders is much more level than the current situation. But most information used in trading isn't from external sources, its from the order book itself. Collocated HFT with 1ms latency can read the book, calculate next move (let's say 20ms), and submit new order in 1 + 20 + 1 = 22ms. A trader with 100ms latency and the same system would take 220ms to respond. This is where most of the HFT advantage comes from, they can see the order book and respond before it even arrives at your computer. With a batch auction everyone sees the previous results at the beginning of the window and has 1s to respond. Low latency is still desirable to allow for more processing, but its no longer overpowered. edit: 1 sec was chosen completely arbitrarily, the best choice could be more or less, or even a random sized window.