I'm designing a market-making algorithm, I was wondering what a decent ROI / day would be to aim for in such a system?
The best options AMM guys are rumored to capture roughly 1/3tick per round trip, net of transaction costs + implementation shortfalls. I had worked for a regional index options MM. With the growth of competition in the recent years, expected returns are actually much lower than that today.
So realistically, in today's environment, you could net maybe 1/5tick per round trip. Estimate the average number of round trips expected per day, and you have all variables needed to work out ROI. good luck.