{"id":4630,"date":"2023-04-13T09:22:09","date_gmt":"2023-04-13T09:22:09","guid":{"rendered":"https:\/\/prosperity.newai.com.au\/?p=4630"},"modified":"2025-04-13T10:45:35","modified_gmt":"2025-04-13T10:45:35","slug":"navigating-mayberries-strategic-market-making-vs-timed-position-taking-in-round-3","status":"publish","type":"post","link":"https:\/\/prosperity.newai.com.au\/index.php\/2023\/04\/13\/navigating-mayberries-strategic-market-making-vs-timed-position-taking-in-round-3\/","title":{"rendered":"Navigating Mayberries: Strategic Market Making vs. Timed Position Taking in Round 3"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"4630\" class=\"elementor elementor-4630\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-339ca5e elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"339ca5e\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b0f4078\" data-id=\"b0f4078\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-565351a elementor-widget elementor-widget-text-editor\" data-id=\"565351a\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.6.7 - 03-07-2022 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#818a91;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#818a91;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p>Round 3 introduced two new products: mayberries (MB) and diving gear (DG). Let&#8217;s first examine the theoretical returns for MB market making.<\/p>\n<p>The bid-ask spread is around 4.x, with total profit potential similar to pearls and bananas, suggesting market making is viable. However, MB&#8217;s position limit of 250 is disproportionately large compared to average trade size and order book depth &#8211; unnecessary for pure market making, which hints at intentional design for position taking strategies.<\/p>\n<p>The round&#8217;s hint that MB is &#8220;sweetest at midday&#8221; (most valuable) proved true, with each day&#8217;s data showing a clear midday price peak. This suggests an optimal taking strategy:<\/p>\n<p>1. Accumulate maximum long position before midday<\/p>\n<p>2. Rapidly switch to maximum short position during midday<\/p>\n<p>Two implementation approaches emerged:<\/p>\n<p><b>Option 1 (Simpler):<\/b><\/p>\n<p>\u2981 Stop market making ~2000-3000 steps before midday<\/p>\n<p>\u2981 Aggressively build full long position<\/p>\n<p>\u2981 At midday, immediately flip to full short position<\/p>\n<p>\u2981 Maintain until ~2000-3000 steps after midday<\/p>\n<p>\u2981 Optionally rebalance to neutral (though EV remains similar)<\/p>\n<p>\u2981 Resume normal market making<\/p>\n<p><b>Option 2 (More sophisticated):<\/b><\/p>\n<p>\u2981 During critical period, split inventory:<\/p>\n<p>&nbsp; &nbsp;\u2981 Majority allocated to timed position taking<\/p>\n<p>&nbsp; &nbsp;\u2981 Small portion (~50) continues market making<\/p>\n<p>\u2981 Advantages: Potentially higher profits<\/p>\n<p>\u2981 Challenges: Risk of being run over in one-sided markets<br>Requires constant optimization<\/p>\n<p>A significant limitation: The provided backtest data only covers the first 1000 steps, making it utterly unrepresentative of the crucial midday period. This questionable design decision makes proper strategy testing impossible.<\/p>\n<p>Given the inability to properly backtest Option 2, I&#8217;ll likely choose Option 1 despite its simplicity, as the alternative carries unacceptable risks without testing capability.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Round 3 introduced two new products: mayberries (MB) and diving gear (DG). Let&#8217;s first examine the theoretical returns for MB market making. The bid-ask spread is around 4.x, with total profit potential similar to pearls and bananas, suggesting market making is viable. However, MB&#8217;s position limit of 250 is disproportionately large compared to average trade [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4537,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[32],"tags":[],"class_list":["post-4630","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-2023r3"],"acf":[],"_links":{"self":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts\/4630","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=4630"}],"version-history":[{"count":4,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts\/4630\/revisions"}],"predecessor-version":[{"id":4634,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts\/4630\/revisions\/4634"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/media\/4537"}],"wp:attachment":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=4630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=4630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=4630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}