Positional Edge refers to a structural or informational advantage held by a market participant due to their existing asset holdings or established market stance. Its purpose is to facilitate more favorable trade execution or risk management.
Mechanism
This advantage can stem from owning a significant portion of an asset, granting influence over its market price, or from having a pre-existing hedging position that allows for more flexible and aggressive quoting in an RFQ system.
Methodology
The strategic application involves leveraging current inventory or risk exposure to optimize pricing in request-for-quote scenarios. This methodology reduces the cost of hedging or enables the facilitation of larger transactions, thereby enhancing profitability and mitigating market impact for substantial crypto trades.
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