Do you have opinions about a third proposal that's occasionally floated, (c) discretize the market's timeline to something smallish but not miniscule? For example, the market maker can move their quotes however often they want, but changes take effect on the next tick, which happens every (say) 1 second. So therefore you can't trade on advance knowledge in the sub-second range, and market makers can't gain a trading advantage vis-a-vis investors solely by having a slightly lower latency connection to the exchange.
It's possible there's some massive downside to that, but afaict the advantages of liquidity that market-makers provide mostly accrue at larger timescales. So it's not clear the millisecond-shaving game is really improving markets (though it provides interesting challenges for technologists).
It's possible there's some massive downside to that, but afaict the advantages of liquidity that market-makers provide mostly accrue at larger timescales. So it's not clear the millisecond-shaving game is really improving markets (though it provides interesting challenges for technologists).