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Why is there a minus spread in my Market Making bot?
Why is there a minus spread in my Market Making bot?

Learn why your Market Making bot shows negative spreads, what causes this phenomenon, and how to adjust your settings if needed.

Pete Darby avatar
Written by Pete Darby
Updated over a month ago

Are you noticing negative spread values in your Market Making bot's order layers? Don't worry - this isn't a bug or error in your configuration. This article explains why negative spreads can appear in your market making activities, when this is normal behavior, and what you can do about it if you want to avoid them.

What is a Negative Spread?

A negative spread occurs when your selling price is lower than your buying price in your market making bot. This might seem counterintuitive at first, as it appears to be losing money on each trade.

Why Does This Happen?

This situation can occur when you set your bot to position orders "one Satoshi better than given position" with the current market conditions:

Best bid (buy) price: 0.00000234

Best offer (sell) price: 0.00000235

Because your bot is configured to place orders one Satoshi better than the market:

Your buy order will be placed at: 0.00000235 (one Satoshi higher than best bid)

Your sell order will be placed at: 0.00000234 (one Satoshi lower than best offer)

Visual Example

As shown in the image:

Order layer configuration Market Making bot Cryptohopper
  • Order layer 1 shows:

    • Buy: 0.00000235

    • Sell: 0.00000234

Spread: -0.00000001 (-0.43%)

Is This Normal?

Yes, this is normal behavior when you configure your bot to position orders "one Satoshi better than given position" in a very tight market. While the spread appears negative, this is part of your market making strategy to capture positions within these tight ranges.

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