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Using months of proprietary data that labels participants by their participant ID, it has been found that during periods of significant volatility, the composition of HFT participants in the book remains mostly constant as a fraction of the total BBO composition. What really changes, it was found, was that the fraction of low-frequency traders aggressing on ...


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By design, market makers do not exacerbate volatility because their trades are, as a whole, net passive.


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There's a decent amount of literature about market making under uncertainty, one just needs to look. Start with the below and then use this title as a search for other relevant articles, it's cited a lot: Optimal Dealer Pricing Under Transactions and Return Uncertainty



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