The implications of extraordinary speed in contemporary financial markets trading

Core Insights - High-frequency traders utilize low-latency trading algorithms to execute and cancel orders at extremely fast speeds, often within 20 milliseconds, which allows them to engage in anticipatory trading and create arbitrage opportunities in the E-mini S&P 500 and SPDR S&P 500 ETF Trust [1] - These trading strategies enable high-frequency traders to earn significant profits after accounting for transaction costs, while other market participants without similar technology face higher execution costs [1] - The study suggests implementing batch auctions as a policy measure to reduce queuing risk for high-frequency traders, which could improve overall market quality [1]