What Is the Advantage of Using an RFQ System over a Central Limit Order Book for Large Options Trades?

The primary advantage is reduced market impact and better pricing. In an RFQ system, the large order is not publicly displayed, preventing other traders from front-running or moving the market against the trade.

The client receives competitive quotes from multiple market makers simultaneously, often resulting in a tighter spread and better execution price than they might achieve by slicing a large order into smaller pieces on a public order book.