What Are the Advantages of an RFQ System over a Continuous Limit Order Book?

The primary advantages of an RFQ system are its ability to handle large, illiquid orders without revealing the trade size, and the competitive nature of the quoting process. This results in less market impact and a narrower effective spread for block trades compared to a limit order book, which would suffer significant slippage.

It also offers more personalized execution for complex or custom derivatives.