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 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.