How does a market making bot manage inventory risk?

OpenMM tracks the base/quote ratio against a target (e.g. 50/50). When inventory skews, it shades orders — making the overweight side more aggressive to sell and less aggressive to buy. The shading magnitude scales with distance from target, keeping the portfolio close to neutral.

What is the most important risk management rule in market making?

When in doubt, do nothing. It is always better to miss a trade than to make a bad one. Position limits act as circuit breakers — if inventory exceeds the configured max, all orders are cancelled automatically until rebalance completes.

Market Making

Inside Our Market Making Stack: From Signal to Execution

March 27, 2026

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10 min read

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Aggelos Kappos(Founder @ QBT Labs)

Market MakingOpenMMTradingArchitectureRisk Management

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