# How Does an RFQ Protocol Mitigate Adverse Selection Risk in Illiquid Markets? ▴ Question

**Published:** 2025-08-09
**Categories:** Question

---

![Sleek, two-tone devices precisely stacked on a stable base represent an institutional digital asset derivatives trading ecosystem. This embodies layered RFQ protocols, enabling multi-leg spread execution and liquidity aggregation within a Prime RFQ for high-fidelity execution, optimizing counterparty risk and market microstructure](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-prime-os-architecture.jpg)

![A polished, dark blue domed component, symbolizing a private quotation interface, rests on a gleaming silver ring. This represents a robust Prime RFQ framework, enabling high-fidelity execution for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/08/optimized-execution-for-institutional-digital-asset-derivatives-rfq.jpg)

## Concept

![A transparent glass sphere rests precisely on a metallic rod, connecting a grey structural element and a dark teal engineered module with a clear lens. This symbolizes atomic settlement of digital asset derivatives via private quotation within a Prime RFQ, showcasing high-fidelity execution and capital efficiency for RFQ protocols and liquidity aggregation](https://options.greeks.live/wp-content/uploads/2025/07/architecting-high-fidelity-execution-for-institutional-digital-asset-derivatives-rfq-protocols-and-systemic-liquidity-aggregation.jpg)

## The Fundamental Asymmetry in Illiquid Markets

In any transaction, the core challenge is managing information. For those operating in [illiquid markets](https://prime.greeks.live/area/illiquid-markets/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) ▴ arenas defined by infrequent trading and a limited number of participants ▴ this challenge is magnified exponentially. The primary risk is not merely price volatility but a more insidious threat ▴ [adverse selection](https://prime.greeks.live/area/adverse-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). This phenomenon occurs when one party to a transaction possesses more, or better, information than the other, creating an imbalance that systematically disadvantages the less-informed participant.

When a large institutional player needs to execute a significant block trade in an asset that seldom trades, the very act of signaling this intention to the broader market can be ruinously expensive. The signal itself moves the price before the trade can even be executed. Other market participants, seeing the large order, will adjust their own prices, assuming the initiator has superior information about the asset’s future value or is acting out of desperation. This is the essence of adverse selection in trading ▴ the informed or large-scale trader is penalized for their knowledge or their size.

Traditional market structures, such as the central limit order book (CLOB), are predicated on transparency and anonymity among a large pool of buyers and sellers. In highly liquid markets, like major equity indices, this system functions with remarkable efficiency. The continuous flow of orders from diverse participants ensures that any single order has a minimal impact on the overall price. However, this model breaks down in illiquid environments.

Placing a large order on a CLOB for an infrequently traded [corporate bond](https://prime.greeks.live/area/corporate-bond/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) or a complex derivative is akin to announcing one’s entire strategy to the opposition. The [information leakage](https://prime.greeks.live/area/information-leakage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is immediate and total, leading to significant price slippage ▴ the difference between the expected price of a trade and the price at which the trade is actually executed. The very mechanism designed to create a fair and open market becomes a liability.

> An RFQ protocol re-frames the trading process from a public broadcast to a series of private, controlled negotiations, directly addressing the information leakage that fuels adverse selection.

![A modular institutional trading interface displays a precision trackball and granular controls on a teal execution module. Parallel surfaces symbolize layered market microstructure within a Principal's operational framework, enabling high-fidelity execution for digital asset derivatives via RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-institutional-digital-asset-derivatives-rfq-protocol-controls.jpg)

## Redefining the Negotiation Protocol

The Request for Quote (RFQ) protocol offers a fundamentally different approach to sourcing liquidity, one that is architected to manage the information asymmetries inherent in illiquid markets. Instead of exposing an order to an anonymous, open market, the RFQ mechanism allows a liquidity seeker to selectively and privately solicit quotes from a curated group of liquidity providers, typically dealers or market makers. This is not a public auction; it is a series of controlled, bilateral negotiations conducted in parallel. The initiator transmits a request ▴ specifying the instrument, quantity, and side (buy or sell) ▴ to a chosen set of counterparties.

These dealers then compete to win the trade by returning their best price. The initiator can then execute against the most favorable quote.

This structure directly mitigates adverse selection in several critical ways. First and foremost, it contains information leakage. The trading intention is revealed only to the selected dealers, not the entire market. This prevents the widespread price adjustments that characterize large orders on a CLOB.

Second, it transforms the interaction from an anonymous transaction into a relationship-based one. The dealers providing quotes are not reacting to an unknown participant; they are often pricing a request from a known client. This allows them to use their history and understanding of that client’s trading patterns to price the risk more accurately. A dealer may offer a better price to a client they know is trading for portfolio rebalancing reasons rather than one they suspect has short-term speculative information.

This ability to differentiate between counterparties is a powerful tool for risk management on both sides of the trade. The [RFQ protocol](https://prime.greeks.live/area/rfq-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), therefore, functions as a precision instrument for liquidity discovery, allowing institutions to find a fair price for a large trade without paying the high cost of public exposure.

![A luminous teal sphere, representing a digital asset derivative private quotation, rests on an RFQ protocol channel. A metallic element signifies the algorithmic trading engine and robust portfolio margin](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-microstructure-optimizing-prime-os.jpg)

![A smooth, off-white sphere rests within a meticulously engineered digital asset derivatives RFQ platform, featuring distinct teal and dark blue metallic components. This sophisticated market microstructure enables private quotation, high-fidelity execution, and optimized price discovery for institutional block trades, ensuring capital efficiency and best execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-system-microstructure-core.jpg)

## Strategy

![Sleek, off-white cylindrical module with a dark blue recessed oval interface. This represents a Principal's Prime RFQ gateway for institutional digital asset derivatives, facilitating private quotation protocol for block trade execution, ensuring high-fidelity price discovery and capital efficiency through low-latency liquidity aggregation](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-portal-optimal-institutional-digital-asset-execution.jpg)

## Strategic Counterparty Curation

The effectiveness of an RFQ protocol is not simply a function of its existence but is contingent on the intelligence applied to its use. The primary strategic lever within the RFQ framework is [counterparty selection](https://prime.greeks.live/area/counterparty-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). This is a process of curation, where a trader constructs a bespoke auction designed to achieve a specific outcome. The choice of which dealers to include in an RFQ is a multi-faceted decision that balances the need for competitive pricing against the risk of information leakage.

Including too few dealers may result in uncompetitive quotes, while including too many increases the probability that the trading intention will be deduced by the wider market, even if the dealers themselves act discreetly. The goal is to find the “sweet spot” where competition is maximized for a minimal information footprint.

Sophisticated trading desks develop rigorous, data-driven frameworks for this selection process. These frameworks often tier liquidity providers based on various performance metrics. Factors considered include:

- **Historical Hit Rate** ▴ The frequency with which a dealer provides the winning quote for similar requests. This is a primary indicator of competitiveness.

- **Quote Quality and Spread** ▴ The average spread of a dealer’s quotes relative to the mid-price at the time of the request. Consistently tight spreads are highly valued.

- **Responsiveness** ▴ The speed and reliability with which a dealer responds to requests. In fast-moving markets, latency can be a significant cost.

- **Post-Trade Performance** ▴ Analyzing the [market impact](https://prime.greeks.live/area/market-impact/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) after trading with a specific dealer. A dealer who manages their own inventory risk effectively will cause less of a market footprint, which is a valuable, though less obvious, benefit to the client.

By systematically tracking these metrics, a trading desk can move beyond a purely relationship-based selection process to one that is quantitatively optimized. For a highly sensitive, large-block trade in an illiquid bond, a trader might select a small group of three to five specialist dealers known for their ability to internalize such risk without immediately hedging in the open market. For a more standard, but still large, FX derivative trade, they might broaden the list to include a larger set of global banks to ensure maximum price competition. This dynamic and analytical approach to counterparty curation is the hallmark of a strategic implementation of the RFQ protocol.

![Metallic hub with radiating arms divides distinct quadrants. This abstractly depicts a Principal's operational framework for high-fidelity execution of institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-execution-prime-os-market-microstructure.jpg)

## The Trade-Off between Information and Competition

Every RFQ represents a delicate balance between achieving price improvement through competition and minimizing adverse selection through information control. This is the central strategic dilemma for the user of an RFQ system. The table below outlines the core trade-offs between a narrow and a broad RFQ auction.

| Factor | Narrow RFQ (e.g. 2-4 Dealers) | Broad RFQ (e.g. 5+ Dealers) |
| --- | --- | --- |
| Information Leakage Risk | Low. The trade intention is confined to a small, trusted group. This is the primary method for mitigating adverse selection. | Higher. As the number of dealers increases, so does the probability that the information will disseminate, either intentionally or through the dealers’ own hedging activities. |
| Price Competition | Moderate. Prices are competitive within the selected group, but may not represent the absolute best price available in the wider market. | High. A larger number of dealers competing for the same trade will theoretically drive the price closer to the true market-clearing level. |
| Relationship Value | High. Allows for trading with specialist dealers who have a deep understanding of the client’s needs and can handle risk discreetly. | Lower. The interaction becomes more transactional and less reliant on deep bilateral relationships. |
| Optimal Use Case | Very large or highly illiquid trades where minimizing market impact is the absolute priority. | Large but more standardized trades in moderately illiquid assets where achieving the best possible price is the primary goal. |

The strategic decision of how many dealers to query is therefore not static. It must be adapted to the specific characteristics of the asset being traded, the size of the order, and the current market conditions. During times of high market volatility, for instance, a trader might opt for a narrower RFQ to trusted counterparties, prioritizing certainty of execution and minimal information leakage over squeezing out the last basis point of price improvement. Conversely, in a stable market for a moderately illiquid security, a broader RFQ might be the optimal strategy to maximize competitive tension.

> The architecture of an RFQ is designed to transform a high-risk public disclosure into a controlled, competitive, and private procurement of liquidity.

![A translucent teal layer overlays a textured, lighter gray curved surface, intersected by a dark, sleek diagonal bar. This visually represents the market microstructure for institutional digital asset derivatives, where RFQ protocols facilitate high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-protocols-driving-optimal-execution.jpg)

![A polished glass sphere reflecting diagonal beige, black, and cyan bands, rests on a metallic base against a dark background. This embodies RFQ-driven Price Discovery and High-Fidelity Execution for Digital Asset Derivatives, optimizing Market Microstructure and mitigating Counterparty Risk via Prime RFQ Private Quotation](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-best-execution-protocol.jpg)

## Execution

![A sleek, dark metallic surface features a cylindrical module with a luminous blue top, embodying a Prime RFQ control for RFQ protocol initiation. This institutional-grade interface enables high-fidelity execution of digital asset derivatives block trades, ensuring private quotation and atomic settlement](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-engine-module-for-high-fidelity-execution-and-liquidity-aggregation.jpg)

## The Operational Playbook

Executing a trade via an RFQ protocol is a systematic process that moves from pre-trade analysis to post-trade evaluation. Each step is designed to maximize [execution quality](https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) while controlling for the risks inherent in illiquid markets. For an institutional trading desk, this process is not ad-hoc but is governed by a clear operational playbook.

- **Pre-Trade Analysis and Strategy Selection** ▴ 

<li>**Liquidity Assessment** ▴ Before initiating any RFQ, the trader must assess the current liquidity profile of the instrument. This involves analyzing historical trade data, current dealer axes (indications of interest), and overall market sentiment. For a corporate bond, this would include looking at recent trade prints on TRACE (Trade Reporting and Compliance Engine) and the bond’s credit rating and maturity.

- **Protocol Selection** ▴ The trader determines if the RFQ protocol is the most suitable execution method. For highly liquid, small-sized trades, a direct market access (DMA) approach using a CLOB might be more efficient. For large, illiquid blocks, the RFQ is typically the superior choice.

- **Counterparty List Generation** ▴ Based on the strategic considerations outlined previously, the trader generates a list of dealers to receive the RFQ. This is often aided by internal systems that rank dealers based on quantitative metrics.

</li>
- **RFQ Initiation and Monitoring** ▴ 

<li>**Message Construction** ▴ The trader constructs the RFQ message, either through a dedicated trading platform UI or via a [FIX protocol](https://prime.greeks.live/area/fix-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) message. This message will contain the security identifier (e.g. CUSIP, ISIN), the side (buy/sell), and the quantity.

- **Dissemination** ▴ The RFQ is sent simultaneously to the selected dealers. The platform ensures that dealers cannot see which other counterparties have received the request, preserving the integrity of the competitive process.

- **Quote Aggregation** ▴ As dealers respond, the platform aggregates the quotes in real-time, displaying the best bid and offer. The trader monitors the responses, noting the spread and the time taken for each dealer to reply.

</li>
- **Execution and Post-Trade Analysis** ▴ 

<li>**Execution Decision** ▴ Once the response window closes (typically a few seconds to a minute), the trader can execute against the best quote. Most platforms offer “one-click” execution. The trader also has the option to not trade if none of the quotes are deemed acceptable.

- **Confirmation and Settlement** ▴ Upon execution, trade confirmation messages are exchanged, and the trade moves into the settlement cycle.

- **[Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA)** ▴ This is a critical final step. The execution price is compared against a variety of benchmarks to assess its quality. Common benchmarks include the arrival price (the mid-price at the time the order was received by the trading desk) and the volume-weighted average price (VWAP) over a specific period. This analysis feeds back into the pre-trade process, refining the counterparty selection model for future trades.

</li>

![Abstractly depicting an Institutional Grade Crypto Derivatives OS component. Its robust structure and metallic interface signify precise Market Microstructure for High-Fidelity Execution of RFQ Protocol and Block Trade orders](https://options.greeks.live/wp-content/uploads/2025/07/principals-integrated-crypto-derivatives-rfq-protocol-architecture.jpg)

## Quantitative Modeling and Data Analysis

The mitigation of adverse selection through RFQ is not merely a qualitative concept; it can be understood and optimized through quantitative analysis. Dealers, when pricing an RFQ, are solving a complex equation that accounts for their own inventory risk, the expected cost of hedging, and, crucially, the perceived information content of the request. A key element of this is understanding the trade-off between offering a competitive price (to win the auction) and protecting oneself from an informed trader.

We can model the execution costs to illustrate the impact of the RFQ process. Consider a scenario where an institution needs to sell a $10 million block of a corporate bond. The table below presents a hypothetical [Transaction Cost](https://prime.greeks.live/area/transaction-cost/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Analysis (TCA) comparing the execution via a public CLOB versus a targeted RFQ protocol. The benchmark price is the prevailing mid-price at the time the order is initiated, assumed to be $100.00.

| Metric | Execution via CLOB | Execution via RFQ (5 Dealers) |
| --- | --- | --- |
| Benchmark Price | $100.00 | $100.00 |
| Information Leakage / Market Impact | High. The large sell order is visible to all, causing the bid price to drop significantly before the full order can be filled. Estimated impact ▴ -35 basis points (bps). | Low. The order is visible only to 5 dealers. The competitive tension and contained information result in a much smaller market impact. Estimated impact ▴ -5 bps. |
| Explicit Costs (Spread) | The average spread paid to liquidity takers on the CLOB. Estimated cost ▴ -10 bps. | The winning quote from the most competitive dealer. Estimated cost ▴ -12 bps (slightly wider to compensate the dealer for taking on the block risk). |
| Average Execution Price | $100.00 – (0.35 + 0.10) = $99.55 | $100.00 – (0.05 + 0.12) = $99.83 |
| Total Transaction Cost (bps) | 45 bps | 17 bps |
| Total Cost on $10M Trade | $45,000 | $17,000 |

This quantitative comparison demonstrates the power of the RFQ protocol in mitigating the costs of adverse selection. The vast majority of the savings comes from the reduction in market impact, which is a direct result of controlling information leakage. While the explicit cost (the bid-ask spread) might be slightly wider in the RFQ to compensate the winning dealer for warehousing the risk, this is more than offset by the preservation of the price level. This analysis forms the core of the quantitative case for using RFQ protocols in illiquid markets.

![A dark, textured module with a glossy top and silver button, featuring active RFQ protocol status indicators. This represents a Principal's operational framework for high-fidelity execution of institutional digital asset derivatives, optimizing atomic settlement and capital efficiency within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-interface-1.jpg)

## System Integration and Technological Architecture

The RFQ process is enabled by a sophisticated technological architecture, with the Financial Information eXchange (FIX) protocol serving as the industry standard for communication. An institutional trader’s Execution Management System (EMS) or Order Management System (OMS) will use specific FIX messages to manage the RFQ lifecycle.

The key message is the **Quote Request (MsgType = R)**. When a trader initiates an RFQ, their system sends this message to the selected dealers. Essential fields within this message include:

- **QuoteReqID (Tag 131)** ▴ A unique identifier for the request.

- **NoRelatedSym (Tag 146)** ▴ Specifies the number of securities in the request.

- **Symbol (Tag 55)** ▴ The identifier of the security (e.g. CUSIP).

- **Side (Tag 54)** ▴ Indicates whether the request is to buy (1) or sell (2).

- **OrderQty (Tag 38)** ▴ The quantity of the security to be traded.

Upon receiving the Quote Request message, the dealers’ systems will process the request and respond with a **Quote (MsgType = S)** message, containing their bid and/or offer. The trader’s EMS aggregates these responses. When the trader decides to execute, a message, often a **New Order – Single (MsgType = D)**, is sent to the winning dealer, referencing the specific quote to be executed.

This seamless, machine-to-machine communication allows for rapid and efficient execution of the RFQ process, integrating it directly into the broader institutional trading workflow. This technological backbone is what makes the strategic and quantitative advantages of the RFQ protocol operationally feasible at scale.

![A spherical Liquidity Pool is bisected by a metallic diagonal bar, symbolizing an RFQ Protocol and its Market Microstructure. Imperfections on the bar represent Slippage challenges in High-Fidelity Execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-optimization-within-principals-market-microstructure-framework.jpg)

## References

- Bessembinder, H. Maxwell, W. & Venkataraman, K. (2006). Market transparency, liquidity externalities, and institutional trading costs in corporate bonds. Journal of Financial Economics, 82 (2), 251-288.

- Di Maggio, M. Kermani, A. & Song, Z. (2017). The value of trading relationships in turbulent times. Journal of Financial Economics, 124 (2), 266-284.

- Hendershott, T. & Madhavan, A. (2015). Click or call? The role of technology in dealer-to-client trading in fixed income. Journal of Financial and Quantitative Analysis, 50 (4), 579-603.

- O’Hara, M. & Zhou, X. (2021). The electronic evolution of corporate bond dealing. Journal of Financial Economics, 140 (2), 368-388.

- Schonbucher, P. J. (2003). Credit Derivatives Pricing Models ▴ Models, Pricing and Implementation. John Wiley & Sons.

- Madhavan, A. (2000). Market microstructure ▴ A survey. Journal of Financial Markets, 3 (3), 205-258.

- Harris, L. (2003). Trading and Exchanges ▴ Market Microstructure for Practitioners. Oxford University Press.

- Committee on the Global Financial System. (2016). Fixed income market liquidity. CGFS Papers No 55. Bank for International Settlements.

- Financial Industry Regulatory Authority (FINRA). (2021). Analysis of Corporate Bond Liquidity and Transaction Costs.

- Wang, Y. & Zhou, X. (2018). The execution quality of corporate bonds. Journal of Financial Economics, 130 (2), 308 ▴ 326.

![Two off-white elliptical components separated by a dark, central mechanism. This embodies an RFQ protocol for institutional digital asset derivatives, enabling price discovery for block trades, ensuring high-fidelity execution and capital efficiency within a Prime RFQ for dark liquidity](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-4.jpg)

## Reflection

![Brushed metallic and colored modular components represent an institutional-grade Prime RFQ facilitating RFQ protocols for digital asset derivatives. The precise engineering signifies high-fidelity execution, atomic settlement, and capital efficiency within a sophisticated market microstructure for multi-leg spread trading](https://options.greeks.live/wp-content/uploads/2025/08/institutional-grade-digital-asset-derivatives-rfq-protocol-high-fidelity-execution-system.jpg)

## From Protocol to Process Intelligence

Understanding the mechanics of the Request for Quote protocol is a foundational step. The true mastery of execution in illiquid markets, however, comes from integrating this protocol into a broader system of operational intelligence. The RFQ is a powerful instrument, but like any instrument, its value is realized through the skill of the operator. The data generated from every request, every quote, and every trade is a valuable asset.

It provides the raw material for refining counterparty selection, for building more accurate pre-trade cost models, and for dynamically adjusting execution strategy in response to changing market conditions. The question for the institutional principal is not simply whether to use an RFQ, but how to build a feedback loop where the output of today’s trades becomes the intelligence that informs tomorrow’s execution strategy. This transforms the act of trading from a series of discrete events into a continuous process of learning and optimization, creating a durable and compounding operational advantage.

![A central translucent disk, representing a Liquidity Pool or RFQ Hub, is intersected by a precision Execution Engine bar. Its core, an Intelligence Layer, signifies dynamic Price Discovery and Algorithmic Trading logic for Digital Asset Derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-visualizing-microstructure.jpg)

## Glossary

<a href="https://prime.greeks.live/area/adverse-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Visualizing institutional digital asset derivatives market microstructure. A central RFQ protocol engine facilitates high-fidelity execution across diverse liquidity pools, enabling precise price discovery for multi-leg spreads](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-across-multi-asset-liquidity.jpg)

## Adverse Selection

Meaning ▴ Adverse selection in the context of crypto RFQ and institutional options trading describes a market inefficiency where one party to a transaction possesses superior, private information, leading to the uninformed party accepting a less favorable price or assuming disproportionate risk. </a><a href="https://prime.greeks.live/area/illiquid-markets/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Beige module, dark data strip, teal reel, clear processing component. This illustrates an RFQ protocol's high-fidelity execution, facilitating principal-to-principal atomic settlement in market microstructure, essential for a Crypto Derivatives OS](https://options.greeks.live/wp-content/uploads/2025/07/institutional-crypto-derivatives-rfq-protocol-execution-engine.jpg)

## Illiquid Markets

Meaning ▴ Illiquid Markets, within the crypto landscape, refer to digital asset trading environments characterized by a dearth of willing buyers and sellers, resulting in wide bid-ask spreads, low trading volumes, and significant price impact for even moderate-sized orders. </a><a href="https://prime.greeks.live/area/information-leakage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract geometric planes in teal, navy, and grey intersect. A central beige object, symbolizing a precise RFQ inquiry, passes through a teal anchor, representing High-Fidelity Execution within Institutional Digital Asset Derivatives](https://options.greeks.live/wp-content/uploads/2025/07/rfq-protocols-for-digital-asset-derivatives-high-fidelity-execution-liquidity-aggregation-price-discovery-market-microstructure.jpg)

## Information Leakage

Meaning ▴ Information leakage, in the realm of crypto investing and institutional options trading, refers to the inadvertent or intentional disclosure of sensitive trading intent or order details to other market participants before or during trade execution. </a><a href="https://prime.greeks.live/area/corporate-bond/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A dynamic visual representation of an institutional trading system, featuring a central liquidity aggregation engine emitting a controlled order flow through dedicated market infrastructure. This illustrates high-fidelity execution of digital asset derivatives, optimizing price discovery within a private quotation environment for block trades, ensuring capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/principal-os-driving-high-fidelity-execution-for-digital-asset-derivatives-through-optimized-rfq-protocols-and-smart-order-routing.jpg)

## Corporate Bond

Meaning ▴ A Corporate Bond, in a traditional financial context, represents a debt instrument issued by a corporation to raise capital, promising to pay bondholders a specified rate of interest over a fixed period and to repay the principal amount at maturity. </a><a href="https://prime.greeks.live/area/rfq-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, metallic mechanism with a luminous blue sphere at its core represents a Liquidity Pool within a Crypto Derivatives OS. Surrounding rings symbolize intricate Market Microstructure, facilitating RFQ Protocol and High-Fidelity Execution](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-crypto-derivatives-rfq-protocol-core-mechanism.jpg)

## Rfq Protocol

Meaning ▴ An RFQ Protocol, or Request for Quote Protocol, defines a standardized set of rules and communication procedures governing the electronic exchange of price inquiries and subsequent responses between market participants in a trading environment. </a><a href="https://prime.greeks.live/area/counterparty-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central mechanism of an Institutional Grade Crypto Derivatives OS with dynamically rotating arms. These translucent blue panels symbolize High-Fidelity Execution via an RFQ Protocol, facilitating Price Discovery and Liquidity Aggregation for Digital Asset Derivatives within complex Market Microstructure](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-engine-for-digital-asset-derivatives-best-execution.jpg)

## Counterparty Selection

Meaning ▴ Counterparty Selection, within the architecture of institutional crypto trading, refers to the systematic process of identifying, evaluating, and engaging with reliable and reputable entities for executing trades, providing liquidity, or facilitating settlement. </a><a href="https://prime.greeks.live/area/market-impact/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Prime RFQ visualizes institutional digital asset derivatives RFQ protocol and high-fidelity execution. Glowing liquidity streams converge at intelligent routing nodes, aggregating market microstructure for atomic settlement, mitigating counterparty risk within dark liquidity](https://options.greeks.live/wp-content/uploads/2025/08/prime-os-high-fidelity-digital-asset-derivatives-rfq-protocol.jpg)

## Market Impact

Meaning ▴ Market impact, in the context of crypto investing and institutional options trading, quantifies the adverse price movement caused by an investor's own trade execution. </a><a href="https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A glowing blue module with a metallic core and extending probe is set into a pristine white surface. This symbolizes an active institutional RFQ protocol, enabling precise price discovery and high-fidelity execution for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-driving-institutional-digital-asset-derivatives-high-fidelity-execution-precise-price-discovery-for-block-trades-and-capital-efficiency.jpg)

## Execution Quality

Meaning ▴ Execution quality, within the framework of crypto investing and institutional options trading, refers to the overall effectiveness and favorability of how a trade order is filled. </a><a href="https://prime.greeks.live/area/fix-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A robust circular Prime RFQ component with horizontal data channels, radiating a turquoise glow signifying price discovery. This institutional-grade RFQ system facilitates high-fidelity execution for digital asset derivatives, optimizing market microstructure and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-engine-for-digital-asset-derivatives-execution.jpg)

## Fix Protocol

Meaning ▴ The Financial Information eXchange (FIX) Protocol is a widely adopted industry standard for electronic communication of financial transactions, including orders, quotes, and trade executions. </a><a href="https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract spheres and linear conduits depict an institutional digital asset derivatives platform. The central glowing network symbolizes RFQ protocol orchestration, price discovery, and high-fidelity execution across market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-high-fidelity-execution-4.jpg)

## Transaction Cost Analysis

Meaning ▴ Transaction Cost Analysis (TCA), in the context of cryptocurrency trading, is the systematic process of quantifying and evaluating all explicit and implicit costs incurred during the execution of digital asset trades. </a><a href="https://prime.greeks.live/area/transaction-cost/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A futuristic, metallic structure with reflective surfaces and a central optical mechanism, symbolizing a robust Prime RFQ for institutional digital asset derivatives. It enables high-fidelity execution of RFQ protocols, optimizing price discovery and liquidity aggregation across diverse liquidity pools with minimal slippage](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-platform-for-institutional-digital-asset-derivatives-rfq-protocol-optimized-execution-management-system-with-robust-liquidity-sourcing.jpg)

## Transaction Cost

Meaning ▴ Transaction Cost, in the context of crypto investing and trading, represents the aggregate expenses incurred when executing a trade, encompassing both explicit fees and implicit market-related costs. </a>

**Tags:** [Market Impact](https://options.greeks.live/area/market-impact/), [Transaction Cost Analysis](https://options.greeks.live/area/transaction-cost-analysis/), [Counterparty Selection](https://options.greeks.live/area/counterparty-selection/), [Bilateral Negotiation](https://options.greeks.live/area/bilateral-negotiation/), [Block Trading](https://options.greeks.live/area/block-trading/), [Transaction Cost](https://options.greeks.live/area/transaction-cost/)	

## Discover More

- 
### [What Are the Primary Risk Considerations When Choosing an Rfq Protocol for Illiquid Assets?](https://options.greeks.live/question/what-are-the-primary-risk-considerations-when-choosing-an-rfq-protocol-for-illiquid-assets/)
![A modular component, resembling an RFQ gateway, with multiple connection points, intersects a high-fidelity execution pathway. This pathway extends towards a deep, optimized liquidity pool, illustrating robust market microstructure for institutional digital asset derivatives trading and atomic settlement.](https://options.greeks.live/wp-content/uploads/2025/07/rfq-protocol-layer-connecting-institutional-digital-asset-liquidity-pools.jpg)

Choosing an RFQ protocol for illiquid assets is the architectural design of a secure communication channel to control information and optimize execution.

- 
### [How Does Asset Liquidity Alter the Optimal Number of Rfq Participants?](https://options.greeks.live/question/how-does-asset-liquidity-alter-the-optimal-number-of-rfq-participants/)
![Abstract visualization of an institutional-grade digital asset derivatives execution engine. Its segmented core and reflective arcs depict advanced RFQ protocols, real-time price discovery, and dynamic market microstructure, optimizing high-fidelity execution and capital efficiency for block trades within a Principal's framework.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-interface.jpg)

Asset liquidity dictates the optimal RFQ participant count by defining the trade-off between price competition and information leakage.

- 
### [What Are the Quantifiable Impacts of Information Leakage on Large Crypto Options Trades?](https://options.greeks.live/question/what-are-the-quantifiable-impacts-of-information-leakage-on-large-crypto-options-trades/)
![A precise stack of multi-layered circular components visually representing a sophisticated Principal Digital Asset RFQ framework. Each distinct layer signifies a critical component within market microstructure for high-fidelity execution of institutional digital asset derivatives, embodying liquidity aggregation across dark pools, enabling private quotation and atomic settlement.](https://options.greeks.live/wp-content/uploads/2025/07/principal-digital-asset-rfq-protocol-layers-for-high-fidelity-execution.jpg)

Information leakage in large crypto options trades is a quantifiable execution cost driven by signaled intent, managed via superior protocol architecture.

- 
### [How Does Counterparty Selection Influence RFQ Leakage in Volatile Markets?](https://options.greeks.live/question/how-does-counterparty-selection-influence-rfq-leakage-in-volatile-markets/)
![A central RFQ engine flanked by distinct liquidity pools represents a Principal's operational framework. This abstract system enables high-fidelity execution for digital asset derivatives, optimizing capital efficiency and price discovery within market microstructure for institutional trading.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-engine-optimal-execution-for-digital-asset-derivatives.jpg)

Counterparty selection in volatile RFQs dictates execution quality by managing the inherent conflict between sourcing liquidity and preventing information leakage.

- 
### [How Does the RFQ Protocol Mitigate Adverse Selection Risk in Bond Trading?](https://options.greeks.live/question/how-does-the-rfq-protocol-mitigate-adverse-selection-risk-in-bond-trading/)
![A dark, textured module with a glossy top and silver button, featuring active RFQ protocol status indicators. This represents a Principal's operational framework for high-fidelity execution of institutional digital asset derivatives, optimizing atomic settlement and capital efficiency within market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-interface-1.jpg)

The RFQ protocol mitigates adverse selection by enabling targeted, discreet liquidity discovery, granting traders precise control over information disclosure.

- 
### [How Can Institutional Traders Use Rfq Protocols to Improve Execution Quality for Block Trades?](https://options.greeks.live/question/how-can-institutional-traders-use-rfq-protocols-to-improve-execution-quality-for-block-trades/)
![A precision-engineered, multi-layered system architecture for institutional digital asset derivatives. Its modular components signify robust RFQ protocol integration, facilitating efficient price discovery and high-fidelity execution for complex multi-leg spreads, minimizing slippage and adverse selection in market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-institutional-digital-asset-derivatives-rfq-execution-platform.jpg)

RFQ protocols improve block trade execution by enabling controlled, competitive liquidity sourcing, which minimizes market impact.

- 
### [When Is a Central Limit Order Book More Advantageous than a Request for Quote System?](https://options.greeks.live/question/when-is-a-central-limit-order-book-more-advantageous-than-a-request-for-quote-system/)
![A segmented circular diagram, split diagonally. Its core, with blue rings, represents the Prime RFQ Intelligence Layer driving High-Fidelity Execution for Institutional Digital Asset Derivatives. Outer segments denote RFQ protocols and order flow pathways, reflecting Market Microstructure for Private Quotation.](https://options.greeks.live/wp-content/uploads/2025/08/high-speed-prime-os-rfq-digital-asset-derivatives-trade-execution.jpg)

A CLOB is superior for liquid, standardized trades; an RFQ excels in preserving capital by controlling information for large or complex orders.

- 
### [How Can Transaction Cost Analysis Be Adapted to Measure the Effectiveness of an RFQ Strategy?](https://options.greeks.live/question/how-can-transaction-cost-analysis-be-adapted-to-measure-the-effectiveness-of-an-rfq-strategy/)
![A dark, precision-engineered module with raised circular elements integrates with a smooth beige housing. It signifies high-fidelity execution for institutional RFQ protocols, ensuring robust price discovery and capital efficiency in digital asset derivatives market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-system-core-high-speed-price-discovery-module.jpg)

Adapting TCA for RFQs means quantifying bilateral negotiation effectiveness to build a superior liquidity sourcing system.

- 
### [Can a Firm Use a Single Rfq Platform to Satisfy Best Execution across All Asset Classes?](https://options.greeks.live/question/can-a-firm-use-a-single-rfq-platform-to-satisfy-best-execution-across-all-asset-classes/)
![An abstract composition of intersecting light planes and translucent optical elements illustrates the precision of institutional digital asset derivatives trading. It visualizes RFQ protocol dynamics, market microstructure, and the intelligence layer within a Principal OS for optimal capital efficiency, atomic settlement, and high-fidelity execution.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-high-fidelity-execution-framework.jpg)

A single RFQ platform can satisfy best execution by centralizing data and standardizing workflows, transforming a fragmented compliance duty into a unified strategic capability.

---

## Raw Schema Data

```json
{
    "@context": "https://schema.org",
    "@type": "BreadcrumbList",
    "itemListElement": [
        {
            "@type": "ListItem",
            "position": 1,
            "name": "Home",
            "item": "https://options.greeks.live"
        },
        {
            "@type": "ListItem",
            "position": 2,
            "name": "Question",
            "item": "https://options.greeks.live/question/"
        },
        {
            "@type": "ListItem",
            "position": 3,
            "name": "How Does an RFQ Protocol Mitigate Adverse Selection Risk in Illiquid Markets?",
            "item": "https://options.greeks.live/question/how-does-an-rfq-protocol-mitigate-adverse-selection-risk-in-illiquid-markets/"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Organization",
    "@id": "https://greeks.live/#organization",
    "name": "Greeks.Live",
    "url": "https://greeks.live/",
    "description": "Greeks.live is the definitive toolkit for the professional options trader, dedicated to empowering our users with institutional-grade data, advanced analytics, and a comprehensive suite of trading tools designed to provide a decisive edge in the market. Every article and guide published under the Greeks.live name is a product of our deep commitment to data-driven analysis and our mission to support the global trading community.",
    "email": "support@greeks.live",
    "logo": {
        "@type": "ImageObject",
        "url": "https://options.greeks.live/wp-content/uploads/2025/07/Greeks.Live-Logo-Icon.svg"
    },
    "hasPart": [
        {
            "@type": "WebSite",
            "name": "About Us",
            "url": "https://about.greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "App Download Page",
            "url": "https://about.greeks.live/#/download/basic_trade"
        },
        {
            "@type": "WebSite",
            "name": "Newcomers' Guide",
            "url": "https://twisty-sign-c8b.notion.site/Guide-for-Greeks-live-X-Deribit-Newbies-5a08a3052822427d800af6eaf3704c8d"
        },
        {
            "@type": "WebSite",
            "name": "Knowledge Base",
            "url": "https://linktr.ee/greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "Option Terminology",
            "url": "https://greekslive.notion.site/88dfc00e7c584d4d8969b6302a79a12f?pvs=4"
        },
        {
            "@type": "WebSite",
            "name": "Terms of Service",
            "url": "https://greeks.live/#/tos"
        },
        {
            "@type": "WebSite",
            "name": "Disclaimer",
            "url": "https://greeks.live/#/disclaimer"
        }
    ],
    "sameAs": [
        "https://x.com/greekslive",
        "https://youtube.com/@greeks_live?si=-KjT0Lkw4WUCI0tD",
        "https://t.me/greekslive_notifications",
        "https://t.me/greekslive",
        "https://pinterest.com/greekslive/"
    ],
    "makesOffer": [
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "RFQ Platform",
                "url": "https://rfq.greeks.live",
                "description": "Execute institutional-grade block trades for crypto options and futures. This platform provides deep, over-the-counter (OTC) liquidity via a professional Request for Quote system.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Lending Tools",
                "url": "https://lend.greeks.live",
                "description": "Manage crypto lending and borrowing activities to earn yield or secure loans. This suite of tools helps users analyze interest rates and manage collateralized debt positions.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Data Lab",
                "url": "https://greeks.live/#/deribit/tools/datalab/BTC",
                "description": "Analyze historical and real-time options data with advanced metrics. This tool is designed for backtesting strategies and identifying market trends through comprehensive data visualization.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Profit & Loss Analysis (PnL)",
                "url": "https://greeks.live/#/deribit/tools/pnl_analysis",
                "description": "Track and analyze the Profit and Loss (PnL) of your options portfolio. This tool provides detailed performance metrics to help traders evaluate and refine their strategies.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Position Visualization",
                "url": "https://greeks.live/#/deribit/tools/pv/BTC",
                "description": "Visualize complex options positions and their corresponding risk profiles. This tool generates payoff diagrams to help traders intuitively understand potential profit, loss, and exposure.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Options Calculator",
                "url": "https://greeks.live/#/deribit/tools/calculator",
                "description": "Calculate the theoretical price and risk parameters ('the Greeks') of crypto options. An essential tool for pricing new trades and analyzing the sensitivity of existing positions.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live Main Platform",
                "url": "https://greeks.live/",
                "description": "The central hub for the Greeks.live suite of professional cryptocurrency options and derivatives trading tools. Access analytics, manage positions, and explore the ecosystem.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Community Forum",
                "url": "https://t.greeks.live",
                "description": "Join the official Greeks.live community. Connect with other traders, share insights, and receive the latest updates directly from the team.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live for Deribit",
                "url": "http://deribit.greeks.live",
                "description": "A dedicated interface for trading on the Deribit exchange. This platform leverages Greeks.live's advanced analytics and tools specifically for users of Deribit's options and futures markets.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live for OKX",
                "url": "http://okx.greeks.live",
                "description": "A dedicated interface for trading on the OKX exchange. This platform integrates Greeks.live's powerful analytics with the OKX marketplace, focusing on its options and derivatives products.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "GLVS.AI Trading Platform",
                "url": "https://www.glvs.ai/",
                "description": "An AI-powered platform for automated crypto options trading. Leverage advanced algorithms and data-driven signals to develop and deploy sophisticated, hands-free trading strategies.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "API Testnet & Sandbox",
                "url": "https://test.greeks.live",
                "description": "A dedicated testnet environment for developers to test their API integrations and automated trading strategies. This sandbox allows for full functionality testing without risking real funds.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        }
    ],
    "subOrganization": [
        {
            "@type": "Organization",
            "name": "GreeksLive HK Co., Limited",
            "email": "support@greeks.live",
            "telephone": "+852-56418949",
            "address": {
                "@type": "PostalAddress",
                "streetAddress": "Unit 11, 27/F, K. Wah Centre, 191 Java Road",
                "addressLocality": "Hong Kong",
                "addressRegion": "North Point",
                "addressCountry": "CN",
                "postalCode": "0000"
            },
            "geo": {
                "@type": "GeoCoordinates",
                "latitude": "22.2932357",
                "longitude": "114.2022026"
            },
            "image": "https://options.greeks.live/wp-content/uploads/2025/08/Wah-Centre-Hong-Kong.jpg"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Article",
    "mainEntityOfPage": {
        "@type": "WebPage",
        "@id": "https://options.greeks.live/question/how-does-an-rfq-protocol-mitigate-adverse-selection-risk-in-illiquid-markets/"
    },
    "headline": "How Does an RFQ Protocol Mitigate Adverse Selection Risk in Illiquid Markets? \u25b4 Question",
    "description": "An RFQ protocol mitigates adverse selection by replacing public order exposure with controlled, competitive, and private liquidity sourcing. \u25b4 Question",
    "url": "https://options.greeks.live/question/how-does-an-rfq-protocol-mitigate-adverse-selection-risk-in-illiquid-markets/",
    "datePublished": "2025-08-09T00:11:27+00:00",
    "dateModified": "2025-10-29T22:09:27+00:00",
    "articleSection": [
        "Question"
    ],
    "author": {
        "@id": "https://greeks.live/#organization"
    },
    "publisher": {
        "@id": "https://greeks.live/#organization"
    },
    "image": {
        "@type": "ImageObject",
        "url": "https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-execution-prime-os-market-microstructure.jpg",
        "caption": "Central metallic hub with radiating arms divides distinct, color-graded quadrants. This abstractly visualizes a Principal's operational framework for institutional digital asset derivatives, ensuring high-fidelity execution and capital efficiency. It depicts advanced RFQ protocols optimizing price discovery across diverse liquidity pools and complex market microstructure. This robust system facilitates algorithmic trading, manages gamma exposure, and mitigates counterparty risk for best execution within a Prime RFQ environment."
    },
    "keywords": [
        "Adverse Selection",
        "Bilateral Negotiation",
        "Block Trading",
        "Corporate Bond",
        "Corporate Bonds",
        "Cost Analysis",
        "Counterparty Selection",
        "Derivatives Trading",
        "Execution Quality",
        "FIX Protocol",
        "Illiquid Markets",
        "Information Leakage",
        "Market Impact",
        "Market Microstructure",
        "Price Slippage",
        "RFQ Protocol",
        "Transaction Cost",
        "Transaction Cost Analysis"
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "WebSite",
    "url": "https://options.greeks.live/",
    "potentialAction": {
        "@type": "SearchAction",
        "target": "https://options.greeks.live/?s=search_term_string",
        "query-input": "required name=search_term_string"
    }
}
```


---

**Original URL:** https://options.greeks.live/question/how-does-an-rfq-protocol-mitigate-adverse-selection-risk-in-illiquid-markets/
