An Indicative Quotation is a provisional, non-binding price signal generated by a market participant or algorithm, communicating potential execution parameters for a digital asset trade. Its fundamental meaning is to provide preliminary price information without incurring a firm commitment, enabling institutional crypto investors to gauge market conditions.
Mechanism
This functions as a low-latency information exchange protocol within an RFQ system. Liquidity providers disseminate preliminary price ranges for crypto assets based on current market conditions and internal risk models. The requesting party’s smart trading system processes this signal to assess market depth and potential trade feasibility, without triggering a firm order or revealing firm intent.
Methodology
A pre-trade information gathering strategy designed to assess market liquidity and price discovery efficiency for large or complex crypto trades. It allows institutional participants to gauge potential execution costs and market responsiveness for block trades or options strategies before committing capital, thereby minimizing market impact from firm inquiries and optimizing execution pathways.
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