If that was actually happening it would mean that spreads (the difference between where market makers buy and sell stocks) were large. In fact, the exact opposite is true. Spreads are tiny. Much smaller than they used to be!
This is because there's not just one HFT. There are tons. So if one of them tries to do this you won't sell to them, you'll sell to one of the other ones for a better price. Yay competition!
Although I wish I could find a better article / source with more info and some hard data to back that up. That sentence is not nearly as compelling as it could be if it had more details.
This is because there's not just one HFT. There are tons. So if one of them tries to do this you won't sell to them, you'll sell to one of the other ones for a better price. Yay competition!