How do HFTs make money?

One of the key strategies employed by market makers is the placement of limit orders. A limit order is an instruction to a broker to buy or sell a security at a specific price or better. By placing both buy and sell limit orders, market makers are able to provide a continuous presence in the market, ready to match incoming orders from other traders.

High-Frequency Trading (HFT) firms engage in a practice known as "Market Making," which encompasses a range of sophisticated strategies designed to capitalize on rapid market movements. These strategies revolve around the placement of orders in the market with the objective of earning profits from the difference between the buying and selling prices, also known as the bid-ask spread.

Market makers play a crucial role in financial markets by providing liquidity to traders. They do this by simultaneously offering to buy and sell securities, thus ensuring that there are always willing buyers and sellers in the market. This activity helps to maintain an orderly and efficient marketplace.

With its robust trading infrastructure and advanced security measures, BTCC is well-positioned to support the activities of market makers in the cryptocurrency market. The exchange's low latency trading engine ensures that market makers can execute their trades quickly and efficiently, while its robust wallet system provides a secure and reliable storage solution for digital assets.

The process of earning the bid-ask spread is at the heart of market making. When a market maker buys a security from a seller at the bid price and then immediately sells it to a buyer at the ask price, they pocket the difference between the two prices, which is known as the spread. This spread represents the market maker's profit.