Market Maker Uptime
Market maker uptime is the proportion of a measurement period during which a firm's quotes were live and simultaneously met the agreed spread and depth obligations. It is the KPI that turns the other two from instantaneous targets into a service level.
TradFi parallel: Like a service level agreement on system availability, except the thing that has to be available is a two sided quote meeting a defined quality bar.
Key Takeaways
- 01Uptime is the share of a period during which spread and depth obligations were satisfied at the same time
- 02Counting any resting order as uptime measures presence rather than service quality
- 03Sampling frequency changes the number materially, so it belongs in the agreement rather than a report footnote
- 04The distribution of downtime matters more than the total, since concentrated outages do far more damage
- 05Pair the percentage with a cap on the longest permitted single outage, and consider stricter targets during known high impact windows
How It Works
Uptime only means something once three things are specified: what counts as being up, how often that is sampled, and over what window the percentage is calculated. Being up should mean the spread and depth obligations are both satisfied at the same instant, not merely that some order exists on the book. An agreement that counts any resting order as uptime is measuring presence rather than service.
Sampling frequency changes the number materially. Hourly sampling can miss short outages entirely, and a firm sampled hourly can report near perfect uptime through gaps that a per second measurement would capture. Neither is dishonest, they measure different things, which is precisely why the frequency belongs in the agreement rather than in a footnote of a monthly report.
The distribution of downtime matters more than the total. A 95 percent monthly target allows roughly 36 hours offline, and those hours are not equivalent. Spread across the month in short intervals during quiet periods, the impact is minor. Concentrated in one continuous window during a volatility event or an unlock, the same 95 percent describes a materially worse service. This is why well drafted agreements pair the percentage with a cap on the longest permitted single outage, and sometimes with a stricter target during defined high impact windows.
Real World Examples
Same percentage, very different service
Two firms each report 96 percent monthly uptime. One was offline in short intervals spread across quiet periods, the other in a single continuous window during a large price move. The headline figure is identical and the service delivered was not.
Uptime counted as presence
An agreement counts any resting order as being up. A firm posts minimal size at a wide spread during difficult conditions and records full uptime. Defining uptime as spread and depth obligations met simultaneously is what prevents this.
Hourly sampling hiding short gaps
Quotes drop for a few minutes several times a day. Hourly sampling records almost none of it. The reported uptime is accurate for the method used and does not describe what a trader experienced.
Frequently Asked Questions
What uptime target is realistic?
Higher targets are achievable on liquid venues in normal conditions and progressively harder during stress or on thin markets. The more useful question is how the target is defined, since 95 percent measured strictly against simultaneous spread and depth obligations is a far stronger commitment than 99 percent measured as any order being present.
Should uptime targets change during volatility?
Many agreements set a different target for defined stressed conditions, which is more honest than pretending one number applies everywhere. The risk is a stress carve out drawn so broadly that it excuses exactly the periods the issuer cared about, so the definition of stressed conditions deserves as much attention as the target.
How is uptime verified?
From order book data sampled at the agreed frequency across the agreed venues. Because the firm is usually the party with the easiest access to that data, an issuer should reserve the right to use an independent measurement source, ideally written into the agreement rather than requested later.
Why measure uptime at all if spread and depth are already measured?
Because spread and depth describe the book at an instant, and uptime describes how often that instant looked acceptable. A firm can hit excellent spread and depth figures during the hours it chooses to quote and be absent the rest of the time. Uptime is what closes that gap.
Related Terms
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