I am wondering how do liquidity providing traders hedge their risk? Let's us they post both a bid and/or ask, and the bid gets hit. Now what if the stock price keeps going down? Is he not losing money now? How does he manage this directional risk? If he does fully hedge when his bid is hit, then by definition he can not make a profit since he is now fully hedged and not to mention he will be losing the bid-ask spread by using a market order to hedge. Appreciate any insights into this.