Time Constant

The Time Constant strategy is designed for traders who need execution at a steady, predictable pace over a fixed duration. It follows a TWAP (Time Weighted Average Price) trajectory, ensuring trades occur evenly across the order’s timeframe.

How It Works

Users specify a duration, setting the total execution period.
The engine prioritizes maker execution when possible but will switch to taker execution if necessary to maintain the schedule.
Trades execute at a consistent rate, independent of market conditions.
Execution is evenly distributed over time, maintaining a steady flow.

When to Use This Strategy

Shorter-Duration Orders – Best for trades requiring execution within a limited timeframe.
TWAP Benchmarking – Useful when the goal is to match the TWAP price over a set period.
Fixed Duration Execution – Ensures a steady execution pace without adapting to market fluctuations.

Potential Drawbacks

Easily Detectable – Other market participants may recognize and react to the strategy.
Lacks Market Awareness – Trades at a fixed rate without adjusting to liquidity or volatility changes.
Less Efficient During Off-Hours – Executes the same volume at low-liquidity times (e.g., 3 AM) and high-liquidity times (e.g., 3 PM), potentially missing optimal trading windows.

This strategy is ideal for traders who require consistent execution and TWAP benchmarking, but it may not be optimal for those looking to adapt to real-time market conditions.