What Specific Algorithms Are Used to Dynamically Adjust Quotes Based on Inventory Delta?

Market-making algorithms often use a concept called "skewing" to adjust quotes. If the provider is long an asset (positive delta), the algorithm will skew the quotes to be more aggressive on the sell side and less aggressive on the buy side.

This encourages market participants to trade against the current inventory imbalance, bringing the delta closer to zero. This process is continuous and automatically managed to control risk exposure.