Spread Capture Strategies

Spread capture strategies are techniques used by market makers to profit from the difference between the bid and ask prices of an asset. By constantly providing quotes on both sides of the market, the maker earns the spread on every executed trade.

Success in this strategy depends on accurate pricing models, efficient risk management, and the ability to maintain quotes in volatile conditions. Market makers must also account for adverse selection, where they are picked off by informed traders.

Effective spread capture requires high-speed automation and constant adjustment of quotes based on order flow and external market data. It is a foundational strategy for providing liquidity in both traditional and digital asset markets.