Before revision:  By analyzing the optimal market making  problem using Markov Decision Processes , we provide simple conditions to determine when a market maker earns zero or positive profits and discuss economic implications. We also prove that higher latency leads to reduced profits for market makers, and conduct numerical experiments to illustrate the effect of latency and relative latency on the market maker's expected profit.
After revision:  By analyzing the optimal market making problem using Markov Decision Processes , we provide simple conditions to determine when a market maker can earn a positive net profit and investigate the effect of latency and relative latency on the market maker's expected profit.