JumpCrisscross said (and then deleted his comment)... Ceteris paribus the client should prefer execution in 1 millisecond over 90 milliseconds. Yes, but we bo

JumpCrisscross said (and then deleted his comment)... Ceteris paribus the client should prefer execution in 1 millisecond over 90 milliseconds. Yes, but we both know that all things are not equal. In fact, the whole raison d'etre of HFT is to ensure that all things are not equal. They are only trading when there is profit between trades that would've occurred between entities A and B. When HFT steps in, either one or both of entities A and B suffer. Your and my bid-ask spreads used to pay for those. Now those extra pennies of compressed spread are going to the market participants instead of the house. That is more efficient. If HFT firms want to be considered the new market makers, then they should be held to the rules of the original market makers. A market maker's job is to provide liquidity continuously; not just when it is profitable for the HFT firm. http://www.sec.gov/answers/mktmaker.htm http://www.sec.gov/answers/mktmaker.htm