RFQ Trading: Gaining Liquidity Access with Sophisticated Protocol
RFQ intrinsically brings the traditional auction-like processes of assets onto electronic platforms and offers price discovery for more competitive pricing while streamlining trade workflow. By routing workflow electronically, this method does not only allow market participants to achieve best execution, but also minimise information leakage of their orders in the market. Market makers and participants are perpetually gaining the opportunities to improve operational efficiency and engage larger amounts of liquidity by leveraging technology, while fulfilling reporting and compliance requirements.
Hydra X’s RFQ Module for electronic OTC venues offers businesses, brokers and exchanges an electronic trading hub for discovery and execution of off-exchange transactions across a wide variety of assets. This module enables users to automate existing voice- and chat- broking services, and electronically capture trade confirmations and records to meet best execution and compliance requirements. Further, both anonymous and directed tradings are available, offering choice and control over price discovery and counterparty selection for users to achieve their trading goals.
With a growing number of investment in assets such as ETFs and other illiquid assets, the adoption rate of RFQ trading seems to accelerate in upcoming years; the market needs tools with better access to liquidity, high levels of transparency and reporting standards that meet the industry’s compliance requirements.
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