Lean your market high-frequency trading strategy

Author: Zero, Created: 2015-06-07 07:52:27, Updated: 2022-05-16 11:18:07

The previously reported high-frequency trading strategies, including Poke for bargains, Join the Makers, Reserve Orders, Iceberg Orders, etc. are all buyer strategies (Investor Strategies) that are used by investment banks, trusts, and life insurance companies in general. The main purpose of these strategies is usually to hide the purpose of the transaction and reduce the price shock caused by large purchases and sales in the market.

The market maker's method is to place both a lower price cap and a higher price cap on the market, and then he waits for someone to eat his cap on one side of the market cap. Now, suppose someone eats his cap at the market cap, then the market maker buys the stock and has inventory of the stock. At this point, the market maker may change the price of the cap to be hung on the market to reduce the risk of stock.

Why would a market maker change the price of his quotation? This is because he now has a stock of the stock, so he hopes that he will not increase the stock too much, and will be able to sell the stock more easily and quickly. So he should lower the price of the buy and sell order in the market.

This is known as Lean Your Market, and is one of the strategies market makers use to manage their inventory exposure.


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