The RFS Process, in the context of institutional crypto trading and Request for Quote (RFQ) systems, refers to the Request for Stream (RFS) process, where a client explicitly requests a continuous, real-time data feed or a sustained series of price quotations for a specific digital asset or derivative. Its primary purpose is to establish a direct, low-latency communication channel for price discovery, allowing institutional participants to receive continuous market data or executable quotes tailored to their trading needs.
Mechanism
This mechanism begins with a client sending an RFS message to a liquidity provider or exchange, specifying the asset, quantity, and desired duration for the price stream. The liquidity provider then responds by initiating a continuous flow of quotes (bid/ask prices) over a dedicated connection, typically via WebSocket or FIX protocol. The stream continues until explicitly canceled by either party, or until predefined conditions, such as expiry or volume limits, are met. This allows for dynamic pricing without repeated individual RFQ requests.
Methodology
The methodology for utilizing an RFS Process involves integrating these price streams directly into algorithmic trading systems for real-time decision-making, such as options pricing models or smart order routers. Robust network infrastructure and efficient data parsing capabilities are critical for processing the continuous flow of quotes. This strategic approach minimizes communication overhead, reduces information latency, and facilitates more sophisticated, automated trading strategies that require persistent access to up-to-date pricing for digital assets and their derivatives.
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