Configuring Multiple Bid and Ask Order Levels in a Market-Making Bot
Summary
This documentation explains how to configure multiple bid and ask orders using an order-level count, an amount step, and a spread step. The level count sets the number of orders on each side. The amount parameter increases or decreases the size of each subsequent order, while the spread parameter widens the distance of subsequent orders from the reference price. Examples show how these settings produce multiple orders with progressively changing sizes and spreads.
A sample configuration applies the settings to a BTC-USDT market, and the documentation notes that displayed prices may differ from configured percentages. Exchange tick-size rules can quantize prices, and market movements after placement can also change the observed spread. Very small spread increments may round multiple orders to the same supported price, so the effective ladder depends on the exchange’s price precision. The material documents configuration behavior; it does not provide evidence about profitability, inventory risk, or optimal parameter choices.
Key ideas
- The order-level setting controls how many bid and ask orders are placed.
- The amount step changes the size of each order after the first level.
- The spread step increases the spacing between successive order prices.
- Exchange tick-size rounding can cause separate configured levels to share a price.
- Market movement after placement can make observed spreads differ from configured values.
Tags
Full text
# Order Levels
# Order Levels
These parameters allow you to set multiple levels of orders on each side and gives you more fine-grained control over the spreads and sizes of each set of orders.
## `order_levels`
The number of order levels to place for each side of the order book.
** Prompt: **
```json
How many orders do you want to place on both sides?
>>>
```
## `order_level_amount`
The size can either increase (if set to a value greater than zero) or decrease (if set to a value less than zero) for subsequent order levels after the first level.
** Prompt: **
```json
How much do you want to increase or decrease the order size for each additional order?
>>>
```
## `order_level_spread`
The incremental spread increases for subsequent order levels after the first level.
** Prompt: **
```json
Enter the price increments (as percentage) for subsequent orders?
>>>
```
!!! warning
Setting `order_level_spread` to a very low number may cause multiple orders to be placed on the same price level. For example, for an asset like SNM/BTC, if you set an order interval percent of 0.4 (~0.4%) because of low asset value, the price of the next order will be rounded to the nearest price supported by the exchange, which in this case might lead to multiple orders being placed at the same price level.
## How it works
Enter the value for `order_levels` to specify how many orders you want to place on each side (buy and sell).
!!! note
**Example**: Entering `3` places three bid and three ask orders on each side of the book, for a total of 6 orders.
Users can also increase or decrease the size of subsequent orders starting from the first order in increments or decrements specified in order_level_amount. This can be set to 0 if you don't want your multiple order sizes to increase Greater than 0(i.e., 0.4) to allow order sizes to increase by 0.4 after the first level Less than 0(i.e., -2) to enable order sizes to decrease by 2 after the first level.
!!! note
**Example**: If the order start size is `7000` and the order step size is `1000`, the second-order size is `8000`, and the third-order is `9000`.
The `order_level_spread` logic works the same as the order step size, but instead, it increases the spreads of your subsequent orders starting from the first order.
!!! note
**Example**: The spread of your first buy and sell order is `1` (1%), and your order interval amount is `2` (2%). The spread of your second order is `3` (3%), and the third-order is `5` (5%).
Let us focus on one side of the order for now: the "sell" side of the order book. Given the sample scenarios above, your active orders will show as:
## Sample configuration
```json
- market: BTC-USDT
- bid_spread: 1
- ask_spread: 1
- order_amount: 0.002
- order_levels: 3
- order_level_amount: 0.002
- order_level_spread: 0.5
```
Running a bot with the parameters above, the `status` command shows 3 levels of orders in the BTC-USDT trading pair:
You might notice that our output's actual spread is not exactly similar to the parameters we have configured for the percentage. This is because of two things:
- quantization: Hummingbot adjusts order prices to match exchange tick rules and
- changes in market price after an order is placed.Shown in full with attribution under the source's licence. Licence: Apache-2.0
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.