Can an RFQ Platform Integrate with a CLOB for Hedging Purposes?
Yes, sophisticated RFQ platforms used by market makers often integrate directly with Central Limit Order Books (CLOBs) for immediate hedging. When a market maker executes a large option trade via RFQ, they acquire a new risk position (e.g.
Delta exposure). To maintain a market-neutral book, their system automatically sends offsetting orders to the CLOB for the underlying asset or futures contract.
This immediate, automated hedging is vital for managing risk and minimizing slippage.