Over 10% of European stock trading has moved to 'slow' auctions specifically designed to protect humans from high-speed bots.
April 1, 2026
Original Paper
LATENCY ARBITRAGE AND FREQUENT BATCH AUCTIONS
SSRN · 6504562
The Takeaway
The 'speed of light' race in finance has become so toxic that markets are voluntarily opting for 'Frequent Batch Auctions.' These systems purposefully delay trades by fractions of a second so that high-frequency traders can't front-run slower, traditional investors.
From the abstract
At the end of 2025, trading via frequent batch auctions (FBA) accounts for about 10.71% of exchange-based equity volume in Europe, underscoring its significance for order execution. Consistent with Budish et al. (2015), we hypothesize that latency arbitrage risk is linked to growth in FBA volume. We show that increases in latency arbitrage opportunities (LAOs) are associated with heightened FBA activity. This pattern indicates that slower traders execute orders via FBA to avoid adverse selection