Latency arbitrage

Latency arbitrage is profiting from being able to act on a price change before slower participants can update their own quotes. It is contested as a matter of market design and fairness, but it is not manipulation: nothing false is communicated.

market microstructure · updated 2026-11-06

See also

• High-frequency trading — High-frequency trading is automated trading characterised by very short holding periods, high message rates and co-located infrast…
• Co-location — Co-location is renting rack space in or next to an exchange's data centre so that the physical distance to the matching engine is …

Terms that refer here

Arbitrage · Co-location · High-frequency trading · Quote stuffing

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