Market Making Skill
Automated two-sided quoting on prediction markets with inventory skew, volatility-adjusted spreads, and risk controls.
Supported Platforms
- Polymarket (post-only maker orders, zero taker fees)
- Kalshi
Chat Commands
Lifecycle
/mm start <platform> <marketId> <tokenId> [flags] Start market making /mm stop <id> Stop and cancel all orders /mm list List active market makers
Monitoring
/mm status Overview of all active MMs /mm status <id> Detailed state for one MM
Configuration
/mm config <id> View current config as JSON /mm config <id> --spread 3 Update config (takes effect next requote)
Start Flags
| Flag | Default | Description |
|---|---|---|
--spread N | 2 | Base half-spread in cents |
--min-spread N | 1 | Minimum spread floor (cents) |
--max-spread N | 10 | Maximum spread cap (cents) |
--size N | 50 | Order size per side (shares) |
--max-inventory N | 500 | Max inventory before aggressive skew |
--skew N | 0.5 | Inventory skew factor (0-1) |
--vol-mult N | 10 | Volatility multiplier for spread widening |
--alpha N | 0.3 | EMA alpha for fair value smoothing (0-1) |
--fv-method M | weighted_mid | Fair value method: mid_price, weighted_mid, vwap, ema |
--interval N | 5000 | Requote interval in ms |
--threshold N | 1 | Min price change (cents) to trigger requote |
--max-pos N | 1000 | Max position value in USD |
--max-loss N | 100 | Max loss before auto-halt (USD) |
--max-orders N | 1 | Orders per side (levels) |
--level-spacing N | (=spread) | Cents between price levels |
--level-decay N | 0.5 | Size decay per level (0-1, e.g. 0.5 = each level half of previous) |
--neg-risk true | false | Enable negative risk mode (Polymarket crypto) |
--name "Name" | auto | Display name for the outcome |
Examples
# Start with defaults /mm start polymarket 0xabc123 98765 # Custom spread and sizing /mm start polymarket 0xabc123 98765 --spread 3 --size 100 --max-inventory 1000 # Tight spread for liquid market /mm start polymarket 0xabc123 98765 --spread 1 --min-spread 1 --max-spread 5 --interval 2000 # 3-level quoting: L1=50 shares, L2=25, L3=12 — spaced 2c apart /mm start polymarket 0xabc123 98765 --max-orders 3 --level-spacing 2 --level-decay 0.5 --size 50 # Check all running MMs /mm status # Widen spread on the fly /mm config polymarket_98765678 --spread 4 # Shut down /mm stop polymarket_98765678
How It Works
- Fair value computed from orderbook (weighted mid, VWAP, or EMA)
- Spread adjusted by recent volatility (wider in volatile markets)
- Skew shifts quotes away from overweight side to manage inventory
- Quotes placed as post-only maker orders (bid and ask)
- Requote cycle: cancel all, recalculate, place new orders
- Auto-halt if realized P&L exceeds max loss threshold
API Usage
typescriptimport { createMMStrategy, type MMConfig } from '../trading/market-making'; const config: MMConfig = { id: 'btc-yes', platform: 'polymarket', marketId: '0x...', tokenId: '12345', outcomeName: 'BTC > 100k', baseSpreadCents: 2, minSpreadCents: 1, maxSpreadCents: 10, orderSize: 50, maxInventory: 500, skewFactor: 0.5, volatilityMultiplier: 10, fairValueAlpha: 0.3, fairValueMethod: 'weighted_mid', requoteIntervalMs: 5000, requoteThresholdCents: 1, maxPositionValueUsd: 1000, maxLossUsd: 100, maxOrdersPerSide: 1, }; const strategy = createMMStrategy(config, { execution, feeds }); botManager.registerStrategy(strategy); await botManager.startBot(strategy.config.id);
