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What Is the Role of a ‘Liquidity Provider’ on an Institutional RFQ Platform?

LPs respond to RFQs with binding two-sided prices (bid/offer), injecting liquidity and enabling price discovery and execution.
Greeks.Live13.11.25

What Is the Role of a ‘Liquidity Provider’ on an Institutional RFQ Platform?

The liquidity provider (LP), typically a market-making firm or bank, responds to the client's Request for Quote (RFQ) by providing a binding two-sided price (bid and offer). Their role is to inject liquidity into the market by committing to buy and sell the requested derivative.

They are essential for the RFQ model as they enable the price discovery and execution for the institutional client.

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