During market making, when would you adjust the spread of your bid/offer? Obviously you adjust the price points of your bid/offers based on new market information, but when do you adjust the spread? Do you adjust the bid/offer spread when someone posts a spread that is narrower than yours, thus forcing you to narrow your spread if you wanted to trade. For example, if I am 2 at 7, and some guy comes in and is like 2 at 6, in order for me to sell my product, I'd have to match or beat. So I'd have to go 2 at 6 or 2 at 5. Would the opposite apply to? If I'm at 2 at 7 and the next best bid/offer is 2 at 10, shouldn't I increase my spread to 2 at 9? But are there any other reasons as to why you'd adjust your spread besides how active you want to be in the market? If I didn't want to trade today, I could just go 0 at 1,000,000 or something. And what happens if someone does post a spread that is narrower than mine, or provides an offer price that is lower than my offer price? What are they thinking and what should I watch out for? Could that imply that they have inside information? Thank you so much for the help!