Yep. That's true, but not because the exchanges are altruistic - but because the exchanges are trying to compete against each other for the greatest volume. BA

Yep. That's true, but not because the exchanges are altruistic - but because the exchanges are trying to compete against each other for the greatest volume. BATS is the latest new-comer to the game and it attracts volume to its exchange by attracting HFT firms who have the highest trade volume with rebates. In fact a lot of these firms don't even try to make money anymore, as long as you have a strategy that breaks even and you collect rebates and trade enough volume. You make a profit. The definition of liquidity becomes pretty fuzzy here when you have HFT take away liquidity from one market center to offer it to the next depending on how various rebate structure will make them the most money; and exchanges themselves in collusion to pump up their trade volume.