Market Making Bots and the Risk Marketing Leaves Out

Market making is a legitimate, well-established institutional strategy — and Felix Bick’s How Not to Get Scammed by AI Trading Apps explains in Chapter 22 exactly why retail products borrowing this label deserve particular scrutiny.

Bick describes market making accurately: simultaneously placing buy and sell orders to profit from the bid-ask spread, providing liquidity to a market in the process. This is genuine institutional practice, but it requires substantial capital, sophisticated risk management, and typically operates at a scale and speed retail traders cannot replicate manually or with off-the-shelf bot software.

The chapter’s key warning centers on what marketing for retail “market making bots” tends to leave out: genuine market making carries real inventory risk — holding an asset that moves against you while waiting to offload it — that is easy to omit from simplified marketing descriptions promising steady passive income.

Bick draws a connection to the previous chapter on arbitrage bots, noting that the technical sophistication implied by the term “market making” can be used to lend unearned credibility to products that don’t actually perform this function, or that perform a much simpler and riskier strategy dressed up under a more impressive name.

This pattern — borrowing legitimate institutional terminology to lend false credibility to a much simpler, riskier retail product — is a recurring theme across this entire section of How Not to Get Scammed by AI Trading Apps, and Bick’s consistent framework for spotting it (ask what risk is being omitted from the marketing description) gives readers a durable tool applicable well beyond just market making bots specifically.

For anyone evaluating a bot product marketed with sophisticated institutional language, this chapter offers Felix Bick’s clear guidance on distinguishing genuine sophistication from borrowed vocabulary.