The trading of equities can significantly vary based on market structure and microstructure. Consider a market characterized by high-frequency trading (HFT), low transaction costs, and tight bid-ask spreads. This environment often encourages market makers to compete aggressively.

In such markets, the impact of trade execution strategies is crucial for achieving optimal outcomes. Further, it can result in varying levels of liquidity and volatility, influencing the price formation process. Based on your understanding of equity market microstructure and trading strategies, answer the following question.