How Does Latency Affect a Market Maker’s Effective Fill Rate on an Electronic RFQ System?

Lower latency is crucial for a high effective fill rate. In fast-moving markets, a market maker with higher latency may find their quotes are stale by the time they reach the recipient, leading to rejections or being consistently outbid.

Fast response times ensure the quote is firm and competitive at the moment of receipt, thus maximizing the chance of execution and a higher effective fill rate.