How Does the Number of Dealers Quoted Affect the Trade Initiator’s Execution Quality?

Generally, increasing the number of dealers quoted improves the trade initiator's execution quality. More dealers mean greater competition, which typically results in tighter spreads and a higher chance of receiving the best possible price.

However, sending the RFQ to too many dealers can slightly increase the risk of information leakage. The optimal number balances the benefit of competition against the risk of market impact.