Liquidity During Bullruns: Why Market Makers Are Vital?

Liquidity during bull runs is crucial, with market makers playing a vital role in supporting the market. Learn how market makers balance neutrality with directional bets, and how their composition and behavior impact the market.

Key takeaways

Liquidity during bull runs is crucial, as market makers are vital for supporting the market.
Market makers should be neutral, but often take directional bets.
The ideal market maker composition is 15-30% of the order book.
Market makers provide inventory and support the treasury.
It’s essential to have good relationships with clients and provide transparency.
The market structure can change over time, affecting market makers.
Market makers may choose not to show up if the market gets too volatile.
In some cases, market makers can’t fulfill their obligations.
Market makers are important for supporting the token during listing and after.
The ideal composition for a market maker depends on the token or security.
Market makers should be transparent and provide metrics.
Regulation can also impact market makers.
Market makers may have to manage the conflict of interest.
Market makers provide inventory and can handle directional bets.
Market makers should have risk mechanisms in place.
Market makers are motivated to do their job well to maintain their market share.
Market makers should provide information to the market.
It’s essential to have a good execution and fill rate.
Market makers may choose not to trade against other market makers.
In some cases, market makers may need to satisfy their own inventory needs.
The market can change over time, affecting market makers.
Market makers can provide liquidity and support the market.
Market makers can be vital for the long-term partnership.
Market makers may choose not to show up if they don’t see profit.

Liquidity During Bullruns: Why Market Makers Are Vital?

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