Overview Features of Market Making in Crypto

Market making in crypto is a scenario where a trader simultaneously provides liquidity to both buyers and sellers in a financial market. Liquidity is a term where an asset can be bought or sold without any effect on the stability or price of the asset. PlatinX provides formal liquidity to the market makers. Market  Making in crypto is highly profitable in concern with liquidity. Market makers instead help ensure the stable function of individual markets and make a small profit per trade via the spread. This spread gives the number of trades taking place over the course of a day. It also quickly adds up which is why for many, it’s worth becoming a crypto market maker.

Working on Market Making in Crypto 

Market makers charge a bit on sale and purchase prices. Market makers demand prices or buy and sell prices by quoting bids. Those investors who want to sell a security should obtain the bid price. This bid price is smaller than the actual price. If an investor wants to buy a security, they would get charged the ask price. This price is set slightly higher than the actual price by PlatinX. The spread is received among the price investors. Hence, the market price is the profit for the market makers. Commission can be earned by the market makers by providing liquidity to their client firms. 

Brokers and Market maker’s view on Crypto

Brokers and market makers are two important features in Crypto market making. Brokers and market makers are inter dependable on each other in Crypto Market Making. Basically, brokers are typically firms that facilitate the sale of an asset to a buyer or seller. But, market makers are typically large investment firms or financial institutions that create liquidity in the market.

Trading of the Market maker in Crypto 

    To become a trader or market maker in crypto via PlatinX one should apply for the market-making firm. One should trade as it is possible by the user. This is because every trader provides liquidity. Also, one should be properly trained and educated via exchange in order to meet up with requirements needed for becoming a market maker. If there is an option in market making then the market makers try to avoid risk as much as possible. One way they hedge is to look at the delta of a call option just purchased and sell an appropriate amount of stock to hedge. Opposingly, if this market maker sells a call then market makers will hedge that with a long stock position.