How Is the 'Spread' Calculated for an Options Quote on an RFQ Platform? ▴ Learn

How Is the ‘Spread’ Calculated for an Options Quote on an RFQ Platform?

The spread is the difference between the bid (the price the market maker is willing to buy at) and the offer (the price they are willing to sell at). On an RFQ platform, the spread is dynamically calculated by the market maker based on their internal fair value model, risk appetite, and the liquidity of the specific option.

The initiator chooses the best available spread.

What Is the Difference between a ‘Quoted Price’ and a Market maker’S’theoretical Fair Value’?

How Does an Asset’s “Quality” Influence Its Bid-Offer Spread?

In an Option Spread Strategy (E.g. a Bull Call Spread), How Many Times Does the Bid-Offer Spread Cost Factor In?

How Does a Market maker’S’inventory Skew’ Affect Their Willingness to Quote a Tighter Bid or a Tighter Offer?