Do market makers use bots?
Yes, market-making bots are commonly used for automated trading activities. These bots, known as market-making algorithms, continuously place buy and sell orders to maintain liquidity and profit from the bid-ask spread. Bots react to market changes within milliseconds, ensuring efficient order execution and minimizing risk. They help maintain tight spreads, especially in high-frequency trading environments. Bots also adjust prices based on volatility, volume, and competitor quotes. Manual market making is rare today due to the speed and complexity of digital markets.
