easy · Market Microstructure High-Frequency Dynamics & Latency Arbitrage
An HFT firm co-locates its servers at the NYSE data center to gain a 50-microsecond advantage in seeing price updates. They use this to pick off stale limit orders on BATS before they can be canceled.
This is known as:
- Payment for Order Flow
- Layering
- Internalization
- Latency Arbitrage
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