Market Maker Bot

Overview

The Market Maker Bot allows you to run an automated market-making strategy in just a few clicks. The bot simultaneously places buy and sell orders around the current market price. This feature helps traders earn spreads while providing market liquidity through a TWAP (Time-Weighted Average Price) strategy with passive only and active limit execution.

This page provides an overview and quick-start guide for market making. Once you're familiar with the basics, refer to the resources below to optimize the bot for your use case, whether focusing on points or profits.

Advanced Settings and Risk ControlsStrategies & Configurations

Key Features

Automated Market Making

• Simultaneously places buy and sell limit orders around current market price

• Uses TWAP strategy for optimal execution timing

• Automatically manages limit order placements and execution

• Splits the notional amount equally between buy and sell orders

Execution Strategy

• TWAP Execution: Orders are executed over time using the TWAP algorithm to minimize market impact. Your notional amount is split equally between the buy and sell sides

• Passive Orders: The bot exclusively uses limit orders (maker orders) to capture spreads and avoid paying taker fees. This may result in slower execution if market conditions don't align with your order placements

• Dynamic Pricing: Orders are placed around the current market price with appropriate spreads to stay competitive

How it Works

• Automated Orders: The bot places limit/maker orders on both sides (Buy/Sell) of the order book.

• Passive Execution: It exclusively uses limit orders (Maker orders); the bot never crosses the spread or uses market/taker orders.

• Dynamic Adjustment: Orders are refreshed periodically to stay close to the market price.

• Safety First: If prices move too fast, the bot pauses to prevent deeply unbalanced exposure.

Quick Start Guide

Follow these steps to launch a bot with standard settings.

1. Select Exchange Account (if you have not connected one please see:

Connecting to Exchanges

2. Select Pair

Choose your Spot or Perpetual pair.

• If it's your first time, we recommend sticking to highly liquid Perpetual pairs like BTC-PERP.

• For spot: you must hold inventory for both assets when starting:

  • The 50/50 Rule: To market-make a Spot pair, you need 50% of the inputted margin in the base token and 50% in the quote token.

  • Example: If you in put $100 in the margin box and you are going to market make HYPE/USDH (Spot), you must hold $50 worth of HYPE and $50 USDH in your wallet.

  • Check Your Wallet: Ensure these funds are in your Spot Account, not your Perpetual/Futures account.

2. Input Margin

You can calculate your trade size in two ways. Inputting one will automatically calculate the other:

• Margin Allocation: Specify the collateral amount you want to commit to this strategy. Increasing margin and leverage boosts volume but also raises the risk of liquidation under high volatility or if prices move against you suddenly while the bot is active.

  • For Spot:

    • Leverage cannot be set for spot.

    • If you in put $100 in the margin box and you are going to market-make HYPE/USDH (Spot), you must hold $50 worth of HYPE and $50 USDH in your wallet.

• Leverage: Adjust your leverage slider if you are market making perps. The bot will automatically calculate the resulting Volume it aims to generate with the amount of collateral you are willing to commit.

3. Select Mode

Stick to Normal for your first trade.

• Keep the default settings for Reference Price, Spread, Directional Bias, and Stop Loss.

• For detailed information on modifying these for advanced strategies, please see:

Advanced Settings and Risk Controls

4. Review Pre-Trade Analytics

Before you click start, check the following:

1. Ensure that the margin you have inputted is less than the your available margin.

2. Ensure that you are satisfied with the fees and max loss that you are estimated to incur with this trade.

   1. Max Loss is the dollar amount calculated from your Stop Loss percentage and your inputted margin. For example, a 10% stop loss with $1,00 margin equals a $10 max loss. The bot monitors your profit/loss in real time and automatically cancels the order if your net loss reaches this amount, protecting the rest of your margin.

For more information on Margin Calculations please see:

Margin Management

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Supported Exchanges and Pairs

• Supported Exchanges: Perpetual DEXs, Centralized Exchanges

• Supported Pair Types: Spot, Perpetuals (Perps)

• Excluded: Futures contracts, options, and direct DEX contract addresses

Fee Structure

• Builder Fee: 2bps (0.02%) for Extended, Hyperliquid and Pacifica

• Maker Fee: Exchange-specific maker rates

• Total Estimated: Builder fee + maker fee × notional amount

Troubleshooting

Insufficient Margin

• If you receive an "Insufficient Margin" error (often indicated by a red warning), your available collateral is too low. Running the bot with insufficient margin will likely lead to your order being cancelled. To resolve this:

  • Add more funds (collateral) to your exchange account

  • Reduce the notional amount of your order

  • Check your account's margin settings (e.g., cross vs. isolated) on the exchange website

  • Check that your balance is in your perp account, not your spot account.

'Paused' Status

• If you see your bot's status change to 'Paused', do not be alarmed. This is a built-in safety feature. The bot pauses itself automatically when its market exposure in one direction (long or short) grows too large. It will resume trading once its net exposure is reduced to a safe level

Insufficient Balance for Spot

• For spot market making, ensure you have at least half the recommended margin/balance in the base token to fund sell orders

• The 50/50 Rule: To market make a Spot pair, you need 50% of the total value in the base token and 50% in the quote token.

• Example: To market make $1,000 worth of HYPE/USDH, you must hold $500 worth of HYPE and $500 USDH in your wallet.

• Check Your Wallet: Ensure these funds are in your Spot Account, not your Perpetual/Futures account.

Order Not Submitting

• Verify all required fields are filled, check your API key permissions, and ensure you have a sufficient balance/margin

Order with Residuals

• Orders that are paused and later resumed may sometimes have small, unfilled residual amounts

Cancelled Market Maker Orders

• Upon canceling a market maker bot order, an automatic order will be placed to close any residual positions, ensuring a net zero balance.