ANTI-LATENCY ARBITRAGE (ALA) MECHANISMS
Clearly, certain market participants are willing to go to great lengths and considerable cost to gain the ultimate speed advantage. But there are occasions when latency arbitrage activity has a negative effect on outcomes for long-term investors, and, as such, it may be beneficial to curb this activity through implementation of thoughtfully designed anti-latency arbitrage mechanisms. XTX Markets’ Matt Clarke looks at the types of ALA mechanisms in the market today and the arguments for and against them.
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