> For the complete documentation index, see [llms.txt](https://docs.tread.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tread.fi/creating-and-submitting-orders/strategies/market-maker.md).

# Market Maker

<figure><img src="/files/01NsSWTSEGY42FC1wDh7" alt=""><figcaption><p>Execution with Market Maker</p></figcaption></figure>

The Market Maker algorithm is designed for users who want to execute a large order while acting as a liquidity provider. The primary goal is to get filled passively by placing limit orders, which can lead to better execution prices and lower trading fees.\
\ <br>

**How It Works**

* It essentially follows the [**VWAP (Volume Weighted Average Price) trajectory**](/creating-and-submitting-orders/advanced-settings/trajectories/vwap.md), but primarily relying on **passive limit orders** to avoid taker fees and minimize market impact.&#x20;
* It only resorts to urgent 'taker' fills if the execution falls seignificantly behind schedule, or in other words, breaches the lower discretionary bound.\
  In short, the goal of this strategy is: be passive first, only become aggressive when necessary to stay on track.

**When to Use This Strategy**

* **High Taker Fee Markets** – Ideal for trading in environments where **taker fees significantly impact profitability**.
* **Non-Alpha-Driven Trades** – Best for execution-focused trades where **price prediction is not a priority**.
* **High Sensitivity to Market Impact** – Suitable for traders aiming to **reduce order visibility and market influence**.

**Potential Drawbacks**

* **Extended Execution Time** – If market conditions limit passive fills, orders may take **longer than expected** to complete.
* **Uncertain Completion** – Relying solely on passive orders means the strategy may face **execution delays or incomplete fills** in low-liquidity conditions.

This strategy is best for traders seeking **cost-efficient execution** with minimal market impact, particularly in **high-fee environments** where avoiding taker orders improves profitability.

#### **Market Maker Configurations**

| [Trajectory](/creating-and-submitting-orders/advanced-settings/trajectories.md)                             | [VWAP](/creating-and-submitting-orders/advanced-settings/trajectories/vwap.md) |
| ----------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ |
| [Passiveness](/creating-and-submitting-orders/advanced-settings/passiveness.md)                             | 0.02                                                                           |
| [Discretion](/creating-and-submitting-orders/advanced-settings/discretion.md)                               | 0.08                                                                           |
| [Participation Rate Target](/creating-and-submitting-orders/advanced-settings/participation-rate-target.md) | 1% *(required)*                                                                |
| [Alpha Tilt](/creating-and-submitting-orders/advanced-settings/alpha-tilt.md)                               | 0                                                                              |
| [Max OTC Percentage](/creating-and-submitting-orders/advanced-settings/max-otc-percentage.md)               | 0%                                                                             |
| [Passive Only](/creating-and-submitting-orders/advanced-settings/passive-only.md)                           | Enabled                                                                        |
| [Active Limit](/creating-and-submitting-orders/advanced-settings/active-limit.md)                           | Disabled                                                                       |
| [Reduce Only](/creating-and-submitting-orders/advanced-settings/reduce-only.md)                             | Disabled                                                                       |
| [Strict Duration](/creating-and-submitting-orders/advanced-settings/strict-duration.md)                     | Disabled                                                                       |