Off-CLOB (Central Limit Order Book) Execution refers to the process of executing trades outside of a traditional, publicly displayed order book, typically through bilateral agreements or dark pools. In institutional crypto trading, particularly for Request for Quote (RFQ) and large block trades, off-CLOB execution is utilized to minimize market impact and reduce information leakage.
Mechanism
This mechanism involves a client requesting a quote from one or multiple liquidity providers, such as OTC desks or specialized institutional platforms, who then provide a firm price for a specified quantity. The transaction is negotiated and executed directly between the parties without being displayed on the public order book until after completion, or not at all if reported only post-trade.
Methodology
The strategic approach prioritizes liquidity sourcing from a network of vetted counterparties and the use of secure, private communication channels for quote dissemination and execution. This allows institutional crypto investors to trade substantial volumes of digital assets and derivatives without disturbing market prices, offering discretion and improved execution quality compared to open market orders.
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