> Capital expenditure (like colocation) is not fundamentally an advantage other market participants don’t have. Except that it is. Market participants cannot a

> Capital expenditure (like colocation) is not fundamentally an advantage other market participants don’t have. Except that it is. Market participants cannot all be right next to exchanges, for physical impossibility reasons. > High frequency traders improve net liquidity in the market. I agree that there are forms of high-frequency trading that improve market liquidity > Would you prefer the pit days of preferential treatment by manual market makers... This is a straw man > legal definition of front-running I'm not a lawyer, and don't know what courts have decided about this issue. I'm guessing they've sided with you. But there are plenty of situations where judges make decisions I disagree with, and I'm guessing there are probably some practical issues with making this kind of front-running illegal anyway. Have any other exchanges opened with rules that address this? Anyway, I certainly don't think all HFT are evil or anything like that, but what you call "latency arbitrage" is clearly front-running and bad for the market: it's basically a "distance from the exchange" tax that doesn't provide any value. I don't know how that should be fixed though, or whether it's possible. Also, I would love some links on ways in which HFTs are good for the market :)