Potential profit from U.S. 'latency arbitrage' trading may be $3 billion How Prevalent and Profitable are Latency Arbitrage Opportunities on U.S. Stock Exchanges?
If the "latency arb" opportunity exists because of fragmentation across stock exchanges/ECN's, then how do HFT's gain an edge in the electronic futures markets where each instrument trades on a single exchange?
Futures v underlyings. And reacting to info (news, econ data) faster. It's not the same as "latency arb" as practiced across US cash venues.