The resting orders that make a market tradeable mostly come from firms that have no opinion about the price. Their business is the spread, and their risk is inventory.
The spread is the compensation
A market maker posts a bid below and an offer above the current price, buying from sellers and selling to buyers continuously.
If both sides fill in roughly equal measure, the firm ends flat and keeps the difference. The profit per trade is small and the volume is enormous.
This is a service being paid for rather than a prediction. The counterparty gets immediate execution, and the spread is the fee for providing it.
Inventory is the risk being managed
Fills are rarely balanced. A market maker who keeps buying is accumulating a position in a falling market, which is precisely when buyers stop appearing.
The firm responds by skewing its quotes, lowering both sides to make further buying less likely and selling more attractive until the position clears.
That skew is visible as the book tilting, and it is often mistaken for a directional signal when it is a firm managing its own balance sheet.
Why spreads widen under stress
Widening the spread is how a maker charges more for the same service when the price is moving faster than the position can be hedged.
Volatility raises the chance of being filled just before a large move, so the compensation demanded per trade rises with the danger of getting caught.
Beyond a point the firm stops quoting entirely, which is why depth can disappear in the moments when it is most needed.
Adverse selection sets the floor
Some counterparties know something the maker does not, and every fill against an informed trader is a loss regardless of the spread charged.
The spread must be wide enough to cover those losses out of the profits earned from uninformed flow, which is why quiet markets have tighter spreads.
Venues with more informed activity or slower infrastructure carry structurally wider spreads for exactly this reason, independent of the asset traded.
What the arrangement means for a trader
The visible depth is a commercial offer, not a commitment. It can be pulled instantly and usually is when conditions turn.
Anyone sizing an order against the book should treat it as capacity available right now rather than capacity that will be there when the order arrives.
Exchange incentive programs, which rebate fees to firms that maintain quotes, are an attempt to keep depth present precisely when the economics argue for withdrawal.