medium · Market Microstructure
An HFT firm detects a price jump in AAPL on Venue A from 180.00 to 180.05. Venue B still displays a stale ask at 180.01 for 1,000 shares.
The firm executes against Venue B and immediately sells on Venue A. If the firm's round-trip connectivity latency is 400 microseconds and Venue B updates its quotes every 500 microseconds, which strategy is being employed and what is the gross profit?
- Spoofing; $50
- Pure Arbitrage; $400
- Latency Arbitrage; $40
- Quote Stuffing; $10
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