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HFTs nearly all provide liquidity rather than take it, which means that the exchange pays them to trade. You are simply wrong - the exchange loses money on most
by yummyfajitas 12y ago
HFTs nearly all provide liquidity rather than take it, which means that the exchange pays them to trade. You are simply wrong - the exchange loses money on most HFTs.
https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_...
http://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2 http://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2
Ask yourself: why would the exchanges pay market makers to provide liquidity?
- crdoconnor 12y agoHFTs provide far more liquidity than is ever needed during normal periods and during periods of market distress (when liquidity is sorely needed) they suddenly and sharply withdraw that liquidity from the market.
- kasey_junk 12y agoJust to be clear, in market circles removing liquidity means a specific thing. It means, crossing a spread to buy or sell existing orders. HFTs do not do this in times of market distress. You can make an argument that HFT market makers stop providing liquidity during strange market conditions, but they do not "remove" it.