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 Manages Inventory Automatically
Arbital 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
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