<center>![](https://e27.co/wp-content/uploads/2013/09/Stock-Market-Data.jpg)</center>
Now that the first payouts have been made you are probably looking for things to do with all of that fresh cash.  Steem comes with its own [built in market](https://steemit.com/market.html) that allows you to buy and sell STEEM and Steem Dollars (SD).   

## Benefits of Internal Market 

The internal market has many benefits over other markets when it comes to trading STEEM.  Among these benefits:

1. No Fees
2. Highest Security
3. Lowest Spread
4. Highest Liquidity 


### No Fees 

The Steem blockchain doesn’t charge trading fees, but it will rate limit your account if you start consuming too much bandwidth. If you hit the bandwidth wall, you can always Power Up to get more access. 

### Highest Security

The internal exchange is secured by your account private key. This means you do not need to trust any third parties with your money.  

### Lowest Spread 

Steem subsidizes the internal market with liquidity rewards that create market competition to give you the best price possible. The spread can be lower because some of the risk is absorbed by the network.

### Highest Liquidity

This is another side effect of liquidity rewards. Traders make more by trading on the internal exchange and therefore there is the greatest market depth.

## Liquidity Rewards

So if you are thinking about trading then you will need to have a solid understanding of how liquidity rewards work.  Every single hour 1200 STEEM ($250+) is awarded to the market maker with the most points.  A market maker earns points any time an order of theirs is filled after being on the books for more than 1 minute.   Points are calculated based upon the volume of STEEM filled on both sides of the book.



```  
     SCORE = BID_VOLUME * ASK_VOLUME
```

As you can see, you gain the most points when you have equal volume on both sides of the book.   After you receive your 1200 STEEM your BID/ASK volume are reset to 0.  This means that everyone who trades consistently will eventually get a payout.  The more volume you pull the more often you will get to the top of the queue.

If you do not trade for a week then your volume will also get reset to 0.  So don't get lazy, provide steady consistent liquidity and you will be rewarded.  

You only get rewarded for orders filled after being left open for 1 minute.  This means canceling / moving your order will reset your time and disqualify you from rewards.  It also means leaving orders on the book that never get filled will earn you nothing.  

### Trading Strategy

If there is only one trader, then it is easy to buy/sell against your own order.  Market forces will quickly cause competition of bots to provide liquidity.  Bots will end up placing orders in front of each other.  Other users will also place orders on the book.  Once this happens it becomes impossible to trade against yourself.

Bots need to make the market in such a way that any losses from trading are less than the liquidity rewards earned.  As competition increases, the profits from liquidity rewards will naturally fall toward 0.

So if you are good with scripts and want to start a bot, there is some easy money to be earned trading. 

### Profit off of Cheaters

Some bots may want to trade against themselves with a narrow spread. Anyone can write a bot that buys their order and then turns around and sells it for slightly more.  Flipping the market will naturally earn the traders a spread on every trade and simultaneously prevent bots from abusing liquidity rewards.

### Preventing Flooding

Bots need to be strategic and ration their transaction rate.  There is rate limiting on bandwidth proportional to Steem Power.  This means that it is not possible to flood the market with transactions without quickly burning through your allotment of bandwidth. Liquidity providers will need to take this into consideration and possibly buy more Steem Power to maximize their potential market making profits.

## Getting most From your Steem Dollar

Over the next week various markets / exchanges will be opening that will allow you to trade Steem Dollars for BTC, Tether, and other cryptos.  It will likely be far more efficient for you to sell your Steem Dollars on these markets than to buy STEEM on the internal market and sell STEEM on Bitrex.  

Don’t forget your Steem Dollars are earning you interest while you hold them.  There is no need to rush to claim your funds.  Wait a few days for the markets to open up and liquidity to improve and you will get much more for your Steem Dollar.