You guys have no idea and are speculating and making stuff up just for the sake of posting. Besides it was one rogue trader not the whole industry. The desk that had issues (from the link you posted) wasn't even a HFT desk.
Again you guys are full of shit. There are rebates in the emini markets but they are limited to a certain amount, not unlimited like on the equity markets.
Do you guys even picked up books to read ? Or actually have the priviledge to walk into an actual Hedge Fund Desk, or a HFT desk ? HFT basically means high frequency, many many trades a day. It can employ tons of strategies, things familiar to you may be exchange rebates, front running, events, arbs, VWAP TWAP, Getting run over by trains services. etc etc ... As to how much a HFT guy makes, it all depends on his strategies profits, his expenses, and all that research and ongoing competition.
???...Are you referring to exchange fee discounts( from already preferential member rates ) at the end of the month when one CME member does important volume? You still have exchange fees to pay, CME never pays you to provide liquidity AFAIK.
Interesting post -- thanks, Lights. I'd be surprised if there aren't still some winners, but overall it must be getting more competitive, with spreads shrinking continually and algorithms getting ever more refined. My guess is that the arms race for lower latency is probably way overdone, in the context of the shrinking pie.
CME pays for providing liquidity but it's limited to a certain amount. Like I said, all you guys are full of shit.
Amount per what? transaction? lot? end of month rebates? salary? under which program? membership?Who do you know gets paid for providing liquidity?
There was a time when there were huge differences in latency - where even fairly big companies were still using 10/100 networks and gig switches and circuits were extremely expensive. Today with advances in virtualization technology 10-gig Ethernet is becoming the standard and 10Gig NICs are pretty cheap - for $500 you can get a dual-port Intel 10G NIC (ebay). Because 1000mbps is now the standard and shops like Verizon have pumped FiOS everywhere we have a pretty decent infrastructure backbone and this has eliminated much of the latency arb that used to exist. That said, there is still a massive difference between colo and non-colo. What was a second is now a millisecond.