Targeted Quotation describes the practice of offering specific bid and ask prices for a crypto asset or derivative directly and exclusively to a select counterparty, typically within a closed institutional request for quote (RFQ) system. This is a bilateral price discovery mechanism.
Mechanism
A liquidity provider or market maker receives an RFQ from a client for a particular instrument and specified size. Based on real-time market data, internal inventory levels, and predefined risk parameters, the provider calculates and transmits a bespoke, executable quote directly to that client.
Methodology
The strategic objective is to facilitate block trades, minimize market impact for large orders, manage information leakage, and enable customized liquidity solutions for institutional clients. This approach offers discretion and price certainty, contrasting with public order books, within the sophisticated crypto options trading environment.
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