Trade confirmation ratios measure the proportion of executed trades that are successfully confirmed and settled within predefined parameters or expected timeframes. In crypto investing, this metric evaluates the reliability and efficiency of post-trade processes across various exchanges and protocols, especially critical for institutional options trading and RFQ crypto.
Mechanism
The calculation involves comparing the number of trades reported as executed by a trading system against the number of corresponding confirmations received from exchanges, custodians, or blockchain validators. Discrepancies, delays, or failures in confirmation are logged and analyzed. This mechanism often uses unique trade identifiers to reconcile transactional data across disparate systems.
Methodology
A high trade confirmation ratio signifies robust operational infrastructure and reliable counterparty performance. This methodology is crucial for risk management, ensuring that capital is not tied up in unconfirmed transactions and that portfolio positions are accurately reflected. For RFQ systems, it provides a feedback loop on the actual settlement efficiency of liquidity providers, influencing future trading relationships and system optimization.
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