Quoting Aggressiveness describes the degree to which a market maker or liquidity provider offers prices that are competitive and close to the prevailing best bid or offer in the market. In crypto trading, its purpose is to attract order flow and secure trades by presenting highly attractive pricing.
Mechanism
This behavior manifests through tight bid-ask spreads, large quoted sizes, or rapid adjustments to price offerings in response to market dynamics. A highly aggressive quote typically positions orders closer to the mid-price, or even inside the current best available prices, to increase the probability of execution. This is often driven by inventory management and risk appetite.
Methodology
The strategic balance required for quoting aggressiveness involves weighing the potential for increased trade execution against the risk of adverse selection or inventory imbalances. In crypto RFQ and institutional options trading, this strategy influences competitiveness, market share, and profitability, as aggressive quoting can capture more flow but also exposes the dealer to greater risk.
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