How Does Price Discovery Differ between an RFQ System and a CLOB in Options Markets?

In a CLOB, price discovery is transparent and continuous, determined by the best public bid and offer. In an RFQ system, price discovery is decentralized and quote-driven.

The price is determined through a closed negotiation process, where the initiator compares multiple private quotes. The final execution price is known only to the involved parties, making the process less transparent to the wider market.