What Is a Request for Quote (RFQ) System and How Does It Inherently Mitigate Front-Running?
An RFQ system is a method of trading where a buyer requests a price (a quote) from one or more market makers. The market makers respond with their best bid/ask prices, and the buyer chooses the best quote.
This process is typically private and off-exchange, meaning the order intention is not publicly visible in an order book. By keeping the order flow private, the RFQ system prevents front-runners from observing the pending order and trading ahead of it.