Market makers compete with each other on speed. If market maker A and B both want to provide you liquidity at $10.00/10.05, whichever one is fastest will be the

Market makers compete with each other on speed. If market maker A and B both want to provide you liquidity at $10.00/10.05, whichever one is fastest will be the one to get your business. If market maker A wants to compete on price and provide liquidity at $10.003/10.049, too bad. That's illegal. He must compete on speed instead. I wrote some tutorials on mechanics of this a while back, you might find them useful: http://www.chrisstucchio.com/blog/2012/hft_apology.html http://www.chrisstucchio.com/blog/2012/hft_apology.html http://www.chrisstucchio.com/blog/2012/hft_apology2.html http://www.chrisstucchio.com/blog/2012/hft_apology2.html http://www.chrisstucchio.com/blog/2012/hft_whats_broken.html http://www.chrisstucchio.com/blog/2012/hft_whats_broken.html