> For the complete documentation index, see [llms.txt](https://arbital-1.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://arbital-1.gitbook.io/docs/automated-strategies/inventory-management.md). # Inventory Management ## What is Inventory? Inventory = how much of the asset the bot is currently holding (long or short). **Example:** * If the bot buys more than it sells → it becomes long * If it sells more than it buys → it becomes short ## How Arbital Bots Manage Inventory Automatically The bot actively prevents runaway exposure by: * Reducing buys when inventory is too long * Reducing sells when inventory is too short * Adjusting spreads dynamically * Stopping one-sided trading if limits are hit You don't need to manually rebalance - the bot does this continuously. ## Directional Bias Directional bias allows you to tilt execution toward buying or selling earlier in time, while still running a two-sided market making strategy. * The bot will always place both buy and sell orders. * Bias only affects **when** buys and sells happen - not **whether** they happen. ## Neutral * Buy and sell orders are distributed evenly over time * Inventory stays close to zero * No directional exposure This is pure market making. ## Long Bias * Buy orders are executed earlier than sell orders * Sell orders are executed later, not removed * Inventory becomes temporarily long Long bias causes the bot to build a long position early, then even out over time through continued market making. ## Short Bias * Sell orders are executed earlier than buy orders * Buy orders are executed later, not removed * Inventory becomes temporarily short Short bias causes the bot to build a short position early, then even out over time through continued market making. ## Important Notes * The strategy always market makes on both sides * Total buy and sell volume still converges over the full run * Bias increases temporary inventory and margin usage * Margin requirements increase by up to 20% at higher bias levels --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://arbital-1.gitbook.io/docs/automated-strategies/inventory-management.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.