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Insurance companies don't have to screw up for people to benefit from having insurance. >the market moved before his order was filled. In what tangible way is

Insurance companies don't have to screw up for people to benefit from having insurance. >the market moved before his order was filled. In what tangible way is this different from "the market moved before Fry got his order in"? The market for a particular stock depends on there being people who are willing to buy it. Saying "the market moved" blurs the fact that there simply weren't any buyers at that price any more by the time he got his order in. If we're talking about a stock with a lot of volume, and Fry "jumps the queue" by setting a limit order in the current spread (something I almost always do myself, FWIW, based on that same investing advice I mentioned), then he'll sell his stock with or without HFTs. What value does the HFT add in this case? The argument is that HFTs add liquidity. Don't HFTs only work with stocks that have high volume? How is adding liquidity when there's already high volume a value?

yummyfajitas 14y ago
Insurance companies don't have to screw up for people to benefit from having insurance. How does insurance benefit someone who's car doesn't crash? It's a couple of hundred bucks a month for nothing. What value does the HFT add in this case? None. If Fry doesn't want to cross the spread and pay for liquidity, he doesn't have to. Similarly, Arthur's Steakhouse doesn't benefit me because I'm a vegetarian and don't want to buy what they are selling. Don't HFTs only work with stocks that have high volume? How is adding liquidity when there's already high volume a value? First of all, many HFTs do work with the long tail of US securities. Second, adding liquidity via price improvement (i.e., narrowing the spread) is useful even if volume is high.