If a venue (Dark pool Exchange) can't update its orders to reflect a price
change in the market faster than HFT, then HFT gets a risk-free profit.
Only when HFT knows the quote has changed and a market has not, will they
be willing to "provide liquidity" to orders resting at a state price
Dark pools on either SIP or Direct Feeds willingly give HFT that edge
to lure investors into increasing investment in dark pools
Separately, retail investors are filled by internalizer at the sip price, while the internalizer buys/sells at the direct feed price
Price- improvement is basically a con
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Disclaimer:
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