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running wild and losing insane amounts of money only to have those losses rolled back [sometimes]

That seems the exchange's fault. Why do non-HFTs accept that?



Because they get the benefit when they fat finger as well. HFT firms tend to actually have more risk than big investment firms. You'll notice that when Knight Capital had a program run wild they went out of business (for all practical purposes). When Goldman did they had their trades busted.




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