Market Making#038

Inventory-Aware Market Making

A market-making strategy that tilts your quotes based on the inventory you already hold, so the bot is more eager to sell when long and to buy when short. This nudges your position back toward neutral automatically (the Avellaneda-Stoikov approach) instead of piling up one-sided risk, letting you keep collecting the bid-ask spread while controlling exposure.

What you need to run it

Real-time inventory tracker per market
Quote-skew model (e.g., Avellaneda-Stoikov style)
Risk dashboard with hard position kill-switch

Where this applies

Markets on Polymarket where inventory-aware market making is the natural play:

Will Bitcoin be up at the 4pm ET close today? (continuous two-sided quoting)
Will the [home team] win tonight's NBA game? (make markets each night)
Will CPI come in above [threshold]% for the upcoming print? (recurring monthly market)

Capabilities this demands

Model / quantCustom code / APIRisk management

At a glance

CategoryMarket Making

Requirements3

CapabilitiesModel / quant, Custom code / API, Risk management

VenuePolymarket (CLOB, Polygon)

Build it

Related market making strategies

This is documentation, not advice. Poly Research & Robotics publishes how these strategies work because the method should be checkable — not as a recommendation to trade them. See the full strategy database (147 strategies) or the data resources directory.