How Quantitative Market Makers Work: Strategy Explained
Key Takeaway: A quantitative market-making strategy posts bid and ask orders, earns the spread when both sides trade, and adjusts its quotes to control inventory and adverse-selection risk. Production systems combine fair-value estimation, inventory skew, order-flow signals, execution models, hedging, and strict risk limits. What Is a Market-Making Strategy? A market maker provides immediacy. When…
