> There is so much liquidity in MSFT that it'd trade at a penny spread with or without HFTs. Thus, the only advantage is speed. You're talking to an unabashed

> There is so much liquidity in MSFT that it'd trade at a penny spread with or without HFTs. Thus, the only advantage is speed. You're talking to an unabashed proponent of subpenny increments. Smaller spreads, more counterparties, faster execution -- these things cannot possibly hurt. Note that I am talking about the concept of HFT. It's true that there are shady operators who abuse rules and undertake things like quote stuffing. I'm not here to defend any of that. > So you got your order filled in 5 milliseconds instead of 6 milliseconds. So what? You're a person. Still a net benefit even for just market orders. Limit orders benefit much more from HFT, particularly the stop-hunting variety. I think of the randomized price action as similar to quantum noise. No one really knows to the nth decimal what the price should be, but it wanders around where the money thinks it should be. So that noise can help trigger your limit trade at exactly the price you want, whereas the false placidity of more granular enforcement is less likely to hit your limit. Now let's look beyond just me and consider that some firms get more relative benefit from HFT than I do, and that these slivers of benefit sum across market participants. > And stocks without enough liquidity to get to a penny spread? The HFTs don't like those stocks, because the "F" is not "H" enough for them to participate. The very nature of HFTs is that they prefer to participate when there is already plenty of liquidity. Of course -- this should not be surprising in the least to anyone paying attention. The reason HFT practitioners participate is to attempt a profitable strategy. Liquidity is the side effect, not the goal. So while it's fair to say they provide liquidity to the market, or even that providing liquidity is the role they play, it's neither their duty nor their motivation. Similar to how commodities speculators provide counterparties for nervous farmers, they are guided by the invisible hand and not by duty.