trading-edge

In hummingbot, we will be market makers. 
Why market makers build strategies that adjust spreads?

for several key reasons:

1. To Manage Risk:

Increased Volatility = Increased Risk: When markets are volatile, prices fluctuate rapidly and unpredictably. Wider spreads help market makers compensate for the increased risk of adverse price movements that could lead to losses. 
  
Protect Against Slippage: Volatility can cause significant slippage, meaning the price at which an order is executed may differ from the expected price. Wider spreads provide a buffer against slippage, ensuring the market maker still captures profit despite price fluctuations.

2. Optimize Profitability:

Capitalize on Uncertainty: During volatile periods, traders are often willing to pay a premium for immediate order execution. Market makers can capitalize on this by widening spreads, increasing their profit per trade. 

Read more about the market makers here

2. Optimize Profitability:

Capitalize on Uncertainty: During volatile periods, traders are often willing to pay a premium for immediate order execution. Market makers can capitalize on this by widening spreads, increasing their profit per trade. 

Read more about the market makers here
https://www.stonex.com/en/financial-glossary/market-makers/