&gt; The big claim with HFT is they &quot;add liquidity&quot;<p>I&#x27;m not sure who is making that claim, but I think what they are implying is that HFT &quot;provides liquidity cheaper than the previous system of pit traders&quot; or even &quot;fragmentation of exchanges has dramatically brought down exchange fees at the cost of added complexity for liquidity providers (and possibly liquidity consumers).  Only HFT systems could have cheaply dealt with this new complexity&quot;.<p>In any case, I&#x27;d sum it up as &quot;it is cheaper to trade now after the rise of HFT than at any other time, at least some of that is because they can market make more efficiently than a dude in a vest&quot;.  Vanguard for one agrees with me (<a href="http:&#x2F;&#x2F;www.cnbc.com&#x2F;2014&#x2F;04&#x2F;25&#x2F;vanguard-chief-defends-high-frequency-trading-firms.html" rel="nofollow">http:&#x2F;&#x2F;www.cnbc.com&#x2F;2014&#x2F;04&#x2F;25&#x2F;vanguard-chief-defends-high-f...</a>).<p>What many critics have claimed is that this has come at the cost of an increase in volatility, especially in the form of flash crashes and it is unclear as of yet if that is better&#x2F;worse than the traditional liquidity crunches we saw under the previous regime and still see in markets not dominated by HFT.<p>The Fed was specifically talking about this in the context of treasury bond (and futures) volatility and a skeptic might wonder which is more likely to have caused volatility in the treasury markets, HFT or unprecedented fed monetary policy.<p>None of which is germane to the question of what the OP meant when he said that HFT insert themselves into transactions.