Inter-Dealer Trading signifies financial transactions conducted directly between market-making institutions, such as banks or specialized trading firms, rather than on public exchanges. In institutional crypto options trading and RFQ crypto, this often involves over-the-counter (OTC) desks and private networks where large block trades are executed. Its purpose is to facilitate large-volume transactions with minimal market impact.
Mechanism
The operational architecture involves dealers quoting prices to one another, typically through proprietary electronic communication networks or direct bilateral negotiation. This enables institutions to manage their inventory, hedge complex positions, and provide liquidity to clients without immediate public disclosure of order flow, which preserves price integrity for significant trades.
Methodology
The strategic approach leverages the network effect among dealers to maintain deep liquidity and efficient risk distribution within wholesale markets. It adheres to principles of discretion and capital efficiency, allowing for price discovery in large size. This model is essential for institutional engagement in crypto, where direct access to liquidity providers for bespoke options or large spot trades is paramount.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
