* It just makes me a bit sad that the profits that rightfully accrue to the sector are then seemingly wasted on HFT infrastructure, a competition that doesn't s

* It just makes me a bit sad that the profits that rightfully accrue to the sector are then seemingly wasted on HFT infrastructure, a competition that doesn't seem to provide anything useful above the standard market-making role. I think that's the point though: the immediate execution that liquidity offers you is the price you pay to hedge risk. The other option is for these companies to set up their own trading desks. For instance, suppose an airline wanted to buy oil at a price it wanted. If the market is very illiquid, they're less willing to cross the bid/ask spread to hit whatever wide offer someone else is posting. The longer they have to wait, the more risk they're at. The "standard market-making role" solves this problem exactly. It allows them to hedge their risk at lesser cost. That is a valuable service, and that is why market makeres exist.