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When Is an RFQ System Preferred over an Order Book for an Institutional Options Trader?

For large-block trades, bespoke contracts, or illiquid assets, to minimize market impact and ensure price competition.
Greeks.Live12.11.25

When Is an RFQ System Preferred over an Order Book for an Institutional Options Trader?

An RFQ system is preferred for large-block trades that would otherwise move the order book price significantly, causing high market impact. It is also the necessary venue for bespoke, non-standard options contracts (exotics) or for options on illiquid underlying assets.

The RFQ allows the trader to discreetly source competitive prices from multiple dealers without public pre-trade transparency.

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