Market Makers vs. HFTs

By Lawrence

In WSJ, there is a piece on Interactive Brokers’ CEO saying that HFTs are having such an unfair advantage over their market making operations that his firm may consider to stop market making for certain securities.

MMs used to have the (almost) absolute advantage in their realm. And now one of the biggest MMs is telling you that they are no longer in control of the game.

Should a number of these major MM firms stop making market for many stocks, etc. that they consider threatened by HFTs, these stocks will face potential extreme swings much more often. Something to be aware of.

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