How Does a Large RFQ Size Improve the ‘Economic Efficiency’ for a Market Maker?

A large RFQ size improves economic efficiency by ensuring that the potential profit from the trade is high enough to justify the fixed costs associated with trade processing, risk management infrastructure, and personnel time. It also allows the market maker to achieve better scaling of their hedging operations.

Small trades might not generate enough profit to cover these overheads, making them economically inefficient.