What is a market making bot?

Abirami Deivendran12 May, 2025Web Development

An automated trading application called a "market making bot" is made to continuously place buy and sell orders in order to supply liquidity to a market. Profiting from the spread—the gap between the ask (sell) and bid (buy) prices is its aim. Key Functions: Places simultaneous buy and sell orders around the current market price. Updates prices dynamically based on market movements. Earns small profits per trade, but operates at high frequency to accumulate gains. Helps reduce volatility and increase trading volume on exchanges. These bots are commonly used by exchanges, crypto projects, and professional traders to maintain healthy, active markets.