BitMex Taking Away From Their API
In BitMex’s official nodejs websocket api connector README.md, they mention ‘order creation’ via authenticated websocket.
Lo and behold, their web hosted websocket docs removed that functionality.
Common knowledge says their sample market maker they have on GitHub was set up to do websocket orders, but lo! behold! Their market maker has been updated to do all POST-style commands via REST.
The result is that our Market Making bot template with Coindex Labs hits rate limits incredibly fast when creating or editing orders, and when we enable our rate limiter we see loop times approaching 1min over 4 instruments (BTC perp, ETH perp, BTC futures) and 3 max orders for bid/ask each.
Woe is me!
With high-frequency trading one of the key aspects is ‘high frequency,’ (no.. no joke!)
The bot, however, is showing net net positive deltas!
This brings us to our next section:
Profitable Market Making Bots!
Our deribit testnet bot is up nearly 500% on equity, while livenet broke it’s 10% gains and sits happily around 15%.. in less than a week!
Binance Futures Market Maker will be in play in the coming weeks.. but their 0% fees after a once-a-day rebate might kill the strategy. Woe!
BitMex has much, much more taker volume on their high-volume instruments.. so gains should be more quick to realize! Time will tell!
Make Markets Across Markets!
Market making is an art. Like pure arbitrage, the math behind making markets in high- or low-frequency trading makes it very unlikely to lose big - while the small, incremental gains over time mean that you'll receive predictable and measurable gains.
This is made possible, for the most part, by having an edge over a market or a combination of markets - like market maker rebates, or reduced fees. When your trades have an advantage over the average trader or algorithm, you've got a sure-bet to win :)
In lamen's terms we automate both sides of the bid/ask spread, until such time as we're too far exposed in one side of the equation and then we wait to settle those positions. The % amounts of balance we're exposed the trigger this safety behavior are configurable in these bots - all of the input variables are!
And while we've seen ~10% net ROI in less than a week and $hundreds thousands notional ETH and $millions notional BTC traded on one exchange, we'd like to get people churning deltas, alphas and notionals with subscriptions!
The exchanges we're looking to support at first are those with market making fee rebates or a fee structure that's condusive to a better trading experience - ie. Okex has a tiered fee structure that decreases with volume, which is superior to Binance's fee tiers that decrease with volume but also require holding illiquid BNB.
Look! A plug!
Some of these market makers could easily be made available for sale, while there are two READ: two whole bots coming available for sale by people who’ve hired me in Telegram.
Look! Another plug!
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