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And are obligated to stay in the market and provide liquidity, no matter what the circumstances.



Unfortunately, HFT firms playing at market maker don't actually have any obligation to stay in the market and provide liquidity. There are some people that want to see this changed (for example, I heard the head of the financial stability department at the Bank of England complaining about it on the radio the other day) but until then...


This is not true.

Some HFT firms have agreements with the exchanges that require them to be in the market providing liquidity no matter what. This is not true of all HFT practitioners, but major key players are required to do so.




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