> It's possible that the situation for executing giant orders in one fell swoop hasn't gotten any better under HFT, but it hardly seems to have made it worse.

> It's possible that the situation for executing giant orders in one fell swoop hasn't gotten any better under HFT, but it hardly seems to have made it worse. Plenty of stocks went "no bid" during the 1929 crash. 1929 is an obsolete example. Heck, the SEC didn't even exist in 1929. A more relevant example is 1987 -- how many stocks went "no bid" on Black Monday? Here's how HFTs operate today. Bid furiously while the going is good. If you find yourself on the wrong side of a trade, you can always hit up the actual market-makers for a penny loss. And if the markets collapse, you pull out. What could be better? Supply liquidity when it's not needed, and stay out precisely when liquidity is most needed. Meanwhile, the registered market-makers are pulling back, or pulling out. And why not? They used to count on having the good times to balance out the bad. But now, the HFTs are siphoning off their profits during good times. Thus, the cross-subsidy has gone away. In periods of market stress, the HFTs go hide under a rock and don't participate in absorbing losses. The effect is: There are now fewer market-makers in periods of market stress. That's how HFTs have made things worse.