Hm, maybe I'm fundamentally misunderstanding something. Let's just say the price is a random walk. It's not directly relevant to the argument, but for simplicity. An HFT MM will make money by continuously quoting ask/bid at the best price, i.e. a lot of trades, capturing a very small spread each time. Given that it's a random walk, buy and sell don't always occur simultaneously either, e.g. in a trending regime where the HFT MM may start pulling quotes due to risk checks and/or inventory/hedging concerns.
So if I am an MM that quotes a wider but gets fewer executions at larger time intervals, shouldn't I be able to also make profit? After all, my queue position is in front of the HFT MM because I put in orders earlier (since I am quoting wider), latency here is irrelevant.
So if I am an MM that quotes a wider but gets fewer executions at larger time intervals, shouldn't I be able to also make profit? After all, my queue position is in front of the HFT MM because I put in orders earlier (since I am quoting wider), latency here is irrelevant.
Can you explain where my logic is faulty?