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

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.

What Is ‘Adverse Selection’ and How Does It Relate to a Market Maker’s Profitability despite a High Fill Rate?

How Does the Latency of Quote Response Affect an RFQ-based Block Trade?

Does a Pool Operator Benefit from a High Number of Stale Shares Submitted by Miners?

How Does “Win Rate” on an RFQ Platform Relate to a Market Maker’s Pricing Strategy?

What Is the Impact of Network Jitter on the Profitability of an RFQ Provider?

How Does ‘Fill Rate’ Specifically Measure Quote Competitiveness on an RFQ Platform?

How Do ‘Indicative Quotes’ Differ from ‘Firm Quotes’ in an RFQ System?

What Is the Concept of ‘Tick Size’ and How Does It Interact with Latency in Options Pricing?

Glossar

Fill Rate

Metric ⎊ Fill rate is a crucial execution metric representing the percentage of an order's total requested volume that is successfully executed at or better than the specified limit price.

Effective Fill Rate

Execution ⎊ Effective Fill Rate, within cryptocurrency derivatives and options trading, quantifies the proportion of a trade's intended volume successfully executed at the desired price or within an acceptable price range.