Deribit RFQ denotes the Request For Quote system provided by Deribit, a prominent cryptocurrency derivatives exchange, specifically designed to facilitate institutional-grade options and futures block trading. This system enables large market participants to privately solicit bilateral price quotes from various liquidity providers for substantial positions. It serves as a dedicated channel for off-exchange, negotiated transactions.
Mechanism
Operationally, a Deribit RFQ process begins when a trader submits a request for a large volume options or futures contract, specifying the asset, strike, expiry, and desired side, to multiple registered market makers simultaneously. These market makers, acting as liquidity providers, then respond with competitive, executable bid and ask prices that are typically valid for a brief duration. The requesting party evaluates these private quotes and selects the most advantageous one for execution.
Methodology
The strategic use of Deribit RFQ aims to achieve superior pricing and minimize adverse market impact for significant order sizes, an objective often difficult to meet on public order books. This methodology provides institutional participants with access to deeper, bespoke liquidity and facilitates the management of slippage risks prevalent in volatile crypto derivatives markets. By enabling private negotiation, it enhances execution efficiency for complex strategies and reduces information leakage associated with large orders.
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