What Is “Information Leakage” in the Context of RFQ Systems?

Information leakage occurs when non-public details about a client's RFQ (e.g. the size, side, or instrument of the intended trade) become known to external parties or market makers before the trade is executed. This can happen through a breach of confidentiality by the platform or the market maker.

This leaked information can then be used to front-run the client's order in the underlying market or in other options markets.