How Do ‘Dark Pools’ Differ from RFQ Platforms in Terms of Anonymity?
Dark pools are private exchanges that allow institutional investors to trade large blocks of securities anonymously without pre-trade price transparency. RFQ platforms also offer anonymity but facilitate a direct price discovery process by soliciting quotes from multiple dealers.
The key difference is that dark pools typically use midpoint pricing, whereas RFQ platforms use a competitive quote process to determine the final price.
Glossar
Dark Pools
Venue ⎊ Dark Pools in the cryptocurrency derivatives context are private trading systems that allow institutional participants to execute large orders anonymously, shielded from the public visibility of order books.
Anonymity
Concealment ⎊ Anonymity within cryptocurrency, options, and derivatives markets represents a spectrum of techniques employed to obscure the link between transaction origins and identifiable entities, impacting market surveillance and regulatory oversight.
Rfq Platforms
Execution ⎊ Rfq platforms, within cryptocurrency derivatives and options trading, facilitate block trades and customized contract specifications outside of centralized exchange order books, offering direct negotiation between counterparties.