3 ms·

subsecond liquidity is definitely overrated and only serves to enrich firms who can afford colocation with the exchange while effectively taxing all other trade

subsecond liquidity is definitely overrated and only serves to enrich firms who can afford colocation with the exchange while effectively taxing all other traders. some kind of system where all trades are matched once a second or every other second, would provide all of the needed liquidity and level the playing field for all traders. 1st second: trades are accepted 2nd second: trades are matched and results are published repeat

MKT 15y ago
that would reduce liquidity drastically. Think about this. Suppose all the quotes show up once a second: if the values of the assets in question are momentarily mispriced relative to some other assets somewhere in the world, HFT algorithms will attack those quotes and make money from taking liquidity instead of providing it. That would also increase adverse selection and reduce the incentives to provide liquidity, resulting in less liquidity for small investors