An Inter-Dealer Quotation System is an electronic network facilitating the exchange of real-time price quotes and trading information between institutional market participants, primarily dealers. In the crypto domain, this refers to specialized over-the-counter (OTC) platforms and institutional liquidity networks that provide request-for-quote (RFQ) functionality for large block trades of digital assets.
Mechanism
The system enables participating dealers to broadcast bid and ask prices for crypto assets, often in response to an RFQ from a buyer or seller. Its operational architecture supports secure, low-latency communication channels and sophisticated price discovery algorithms. This ensures efficient execution for substantial trade sizes, mitigating market impact that might occur on public order books.
Methodology
Institutional crypto traders utilize inter-dealer quotation systems to execute large-volume digital asset transactions with minimal price slippage and discretion. This methodology provides direct access to deep liquidity pools and negotiated pricing, offering an alternative to public exchange trading that is essential for managing significant capital positions without influencing smaller, retail-dominated markets.
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