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The issue would be that market makers would need to inject their orders (quotes) at a greater distance from the mid-price, in order to protect themselves agains
by gd1 12y ago
The issue would be that market makers would need to inject their orders (quotes) at a greater distance from the mid-price, in order to protect themselves against market movement during the minimum lifetime you propose. If my bid and offer is obligated to sit in the market for x seconds, then it is potentially a sitting duck for any adverse event during that time period, and I would have to quote wider to cover that possibility.