# What Are the Best Practices for Creating Tiered Dealer Lists for RFQs? ▴ Question

**Published:** 2025-08-03
**Categories:** Question

---

![A sleek, multi-layered system representing an institutional-grade digital asset derivatives platform. Its precise components symbolize high-fidelity RFQ execution, optimized market microstructure, and a secure intelligence layer for private quotation, ensuring efficient price discovery and robust liquidity pool management](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-rfq-execution-digital-asset-derivatives-platform-prime-os.jpg)

![An abstract geometric composition visualizes a sophisticated market microstructure for institutional digital asset derivatives. A central liquidity aggregation hub facilitates RFQ protocols and high-fidelity execution of multi-leg spreads](https://options.greeks.live/wp-content/uploads/2025/07/optimized-rfq-execution-framework-for-digital-asset-derivatives-trading.jpg)

## Concept

The construction of a [tiered dealer](https://prime.greeks.live/question/how-can-a-tiered-dealer-system-be-dynamically-adjusted-to-market-conditions/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) list for [Request for Quote](https://prime.greeks.live/area/request-for-quote/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (RFQ) protocols is the foundational act of architecting a firm’s access to liquidity. It is the system through which an institution imposes order upon the fragmented, often opaque, world of off-exchange trading. Viewing this process as a mere administrative task of compiling contacts fundamentally misunderstands its purpose.

A properly designed dealer hierarchy functions as a dynamic, proprietary risk management and performance optimization engine. It is a clear articulation of a firm’s strategic priorities, translating subjective counterparty relationships and objective performance data into a quantifiable, actionable framework for sourcing liquidity with precision and control.

At its core, the tiered list is an expression of institutional intent. It codifies which counterparties receive the first opportunity to price a firm’s most sensitive orders, which are invited to compete on more standardized inquiries, and which are held in reserve. This segmentation is a direct reflection of trust, a currency built from a counterparty’s demonstrated capacity to provide competitive pricing, absorb risk without signaling [market impact](https://prime.greeks.live/area/market-impact/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), and operate with discretion.

The architecture of these tiers dictates the quality of execution, the degree of [information leakage](https://prime.greeks.live/area/information-leakage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), and ultimately, the capital efficiency of the [trading desk](https://prime.greeks.live/area/trading-desk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). An undisciplined approach to dealer management invites adverse selection, where a firm’s flow is systematically shown to the least advantageous counterparties, resulting in suboptimal pricing and heightened market risk.

> A tiered dealer list is a firm’s proprietary system for ranking and engaging liquidity providers based on quantifiable performance and qualitative trust.

The system’s efficacy hinges on its ability to evolve. A static list, one that is not continuously recalibrated with fresh performance data, quickly becomes a liability. The market is a fluid environment; dealer appetites shift, risk limits change, and individual traders move between firms. A responsive tiering structure accounts for this dynamism.

It incorporates a feedback loop where every [RFQ](https://prime.greeks.live/area/rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) interaction, whether won or lost, generates data that refines the profile of each counterparty. This data-driven approach allows a trading desk to move beyond legacy relationships and anecdotal evidence, grounding its [liquidity sourcing](https://prime.greeks.live/area/liquidity-sourcing/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) strategy in a rigorous, empirical foundation. The result is a system that is both resilient and adaptive, capable of optimizing execution outcomes across a wide spectrum of market conditions and asset classes.

![A precision algorithmic core with layered rings on a reflective surface signifies high-fidelity execution for institutional digital asset derivatives. It optimizes RFQ protocols for price discovery, channeling dark liquidity within a robust Prime RFQ for capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-optimized-for-precision.jpg)

## What Is the Primary Function of Dealer Tiering?

The primary function of [dealer tiering](https://prime.greeks.live/area/dealer-tiering/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is to systematize and optimize the process of bilateral price discovery. It provides a structured mechanism to direct specific types of order flow to the counterparties most likely to provide the best outcome for that particular trade. For large, sensitive, or illiquid orders, this means routing an RFQ to a small, select group of Tier 1 dealers who have earned the right to see that flow through consistent, high-quality pricing and minimal information leakage. For smaller, more liquid, and less sensitive orders, the inquiry can be broadcast to a wider group of Tier 2 and Tier 3 dealers, fostering greater competition without jeopardizing the core objectives of the trade.

This targeted dissemination of inquiry is a powerful tool for mitigating risk. By restricting the visibility of a large order, a firm reduces the probability that its trading intentions will be deciphered by the broader market, an event that could cause prices to move against its position before the trade is fully executed. The [tiering system](https://prime.greeks.live/area/tiering-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), therefore, acts as a sophisticated information firewall.

It ensures that the firm’s most valuable asset, its knowledge of its own order book, is shared only with counterparties who have demonstrated their trustworthiness and their alignment with the firm’s execution objectives. This control over information is a critical component of achieving [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite).

![Sleek, contrasting segments precisely interlock at a central pivot, symbolizing robust institutional digital asset derivatives RFQ protocols. This nexus enables high-fidelity execution, seamless price discovery, and atomic settlement across diverse liquidity pools, optimizing capital efficiency and mitigating counterparty risk](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-protocol-nexus.jpg)

![A central, symmetrical, multi-faceted mechanism with four radiating arms, crafted from polished metallic and translucent blue-green components, represents an institutional-grade RFQ protocol engine. Its intricate design signifies multi-leg spread algorithmic execution for liquidity aggregation, ensuring atomic settlement within crypto derivatives OS market microstructure for prime brokerage clients](https://options.greeks.live/wp-content/uploads/2025/07/precision-rfq-engine-for-crypto-derivatives-liquidity-aggregation.jpg)

## Strategy

Developing a strategic framework for tiered dealer lists requires a transition from a conceptual understanding to a defined, data-driven methodology. The strategy must be rooted in a clear set of institutional objectives, typically centered on enhancing execution quality, minimizing market impact, and building resilient counterparty relationships. A successful strategy is multi-dimensional, integrating both quantitative performance metrics and qualitative assessments into a unified scoring system. This system becomes the central logic engine for the entire RFQ process, governing how liquidity is sourced in real-time.

The initial step involves defining the criteria that will be used to evaluate and segment dealers. These criteria must be comprehensive, measurable, and directly relevant to the firm’s trading goals. Relying on a single metric, such as [hit rate](https://prime.greeks.live/area/hit-rate/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), provides an incomplete picture. A dealer may have a high hit rate but consistently provide pricing that is only marginally better than the rest of the pack.

A more robust approach incorporates a balanced scorecard of metrics. This ensures that the evaluation process captures the full spectrum of a dealer’s performance, from the speed and competitiveness of their quotes to their willingness to commit capital in challenging market conditions.

![Abstract forms depict interconnected institutional liquidity pools and intricate market microstructure. Sharp algorithmic execution paths traverse smooth aggregated inquiry surfaces, symbolizing high-fidelity execution within a Principal's operational framework](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-microstructure-prime-os-1.jpg)

## Quantitative and Qualitative Evaluation Frameworks

The foundation of a dealer tiering strategy is a hybrid evaluation model that gives appropriate weight to both hard data and soft factors. The quantitative component is the bedrock of the analysis, providing an objective measure of a dealer’s pricing efficacy. The qualitative component adds a layer of human judgment, accounting for factors that are difficult to quantify but are nonetheless critical to a successful trading relationship.

Quantitative metrics form the objective core of the evaluation. These data points are captured directly from the firm’s [Execution Management System](https://prime.greeks.live/area/execution-management-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (EMS) or a dedicated RFQ platform. The most effective models track these metrics across different asset classes, trade sizes, and levels of market volatility to build a detailed and contextualized performance profile for each dealer.

- 
**[Price Competitiveness](https://prime.greeks.live/area/price-competitiveness/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)** ▴ This is measured by how a dealer’s quote compares to the other quotes received for the same RFQ. It can be calculated as [price improvement](https://prime.greeks.live/area/price-improvement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) over the mean or median quote, or as a “win rate” on pricing.

- 
**Response Time** ▴ The latency between sending the RFQ and receiving a valid quote is a critical factor, especially in fast-moving markets. Consistently slow response times can indicate a lack of automation or a lower priority placed on the firm’s flow.

- 
**Hit Rate** ▴ This is the percentage of RFQs a dealer prices that result in a trade. While a useful metric, it must be analyzed in context. A very high hit rate could suggest a dealer is only pricing inquiries they are certain to win, avoiding more challenging requests.

- 
**Hold Time** ▴ The duration for which a dealer is willing to hold their quoted price firm is a direct measure of their risk appetite and commitment. Longer hold times provide the buy-side trader with more time to make a decision and are highly valuable.

Qualitative factors capture the human and relationship-driven aspects of the counterparty dynamic. These are typically assessed through periodic, structured reviews with traders and portfolio managers. While subjective, they provide essential context to the quantitative data.

- 
**Balance Sheet Commitment** ▴ This refers to a dealer’s perceived willingness to provide liquidity, particularly for large or difficult-to-trade instruments, even when it requires taking on significant risk.

- 
**Information Quality** ▴ A valuable counterparty provides insightful market color, commentary, and axe information that helps the trading desk make better decisions. This is a measure of the intellectual capital the dealer brings to the relationship.

- 
**Operational Efficiency** ▴ This encompasses the entire post-trade process. A dealer with a smooth, automated, and error-free settlement and confirmation process reduces operational risk and overhead for the firm.

> A truly effective tiering strategy integrates objective performance data with structured qualitative assessments to create a holistic view of each counterparty’s value.

The synthesis of these two evaluation frameworks is achieved through a weighted scoring model. The firm assigns a specific weighting to each quantitative and qualitative criterion based on its strategic priorities. For an institution focused primarily on minimizing execution costs, price competitiveness might receive the highest weighting.

For a firm trading in illiquid markets, balance sheet commitment might be the most important factor. The resulting scores are then used to segment dealers into their respective tiers.

![A sophisticated, symmetrical apparatus depicts an institutional-grade RFQ protocol hub for digital asset derivatives, where radiating panels symbolize liquidity aggregation across diverse market makers. Central beams illustrate real-time price discovery and high-fidelity execution of complex multi-leg spreads, ensuring atomic settlement within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-grade-rfq-protocol-facilitating-atomic-settlement-and-high-fidelity-execution-of-multi-leg-spreads.jpg)

## Dynamic Tiering versus Static Tiering

An essential strategic decision is whether to implement a dynamic or static tiering system. A static system involves periodic, often quarterly or annual, reviews of dealer performance, with re-tiering occurring only at these fixed intervals. A dynamic system, by contrast, uses a rolling window of performance data to continuously update dealer scores and, if necessary, adjust their tier assignments in near real-time.

The table below compares the core attributes of these two strategic approaches.

| Feature | Static Tiering Model | Dynamic Tiering Model |
| --- | --- | --- |
| Review Cadence | Quarterly or Annually | Continuous or Weekly |
| Data Window | Fixed, long-term (e.g. 12 months) | Rolling, short-term (e.g. 30-90 days) |
| Responsiveness to Change | Low; slow to react to shifts in dealer performance | High; quickly adapts to changes in dealer appetite or capability |
| Implementation Complexity | Lower; requires less sophisticated data infrastructure | Higher; requires robust data analytics and automation |
| Dealer Behavior Incentive | Can encourage dealers to perform well only near review periods | Encourages consistent, high-quality performance at all times |
| Risk of Stale Tiers | High; tiers may not reflect current market realities | Low; tiers are a consistently fresh reflection of performance |

While a [dynamic tiering](https://prime.greeks.live/area/dynamic-tiering/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) model is more complex to implement, its strategic advantages are significant. It creates a more meritocratic and competitive environment for dealers, as they are aware that their performance is being continuously monitored and that their tier status is directly linked to their recent activity. This fosters a stronger alignment of interests between the buy-side firm and its liquidity providers.

Furthermore, a dynamic system is more resilient. It can automatically detect and respond to a sudden degradation in a dealer’s performance, potentially rerouting flow away from a counterparty that may be experiencing internal issues, thereby protecting the firm from unnecessary execution risk.

![A sleek, angular device with a prominent, reflective teal lens. This Institutional Grade Private Quotation Gateway embodies High-Fidelity Execution via Optimized RFQ Protocol for Digital Asset Derivatives](https://options.greeks.live/wp-content/uploads/2025/08/institutional-crypto-derivatives-rfq-high-fidelity-execution-gateway.jpg)

![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)

## Execution

The execution of a tiered dealer list strategy is where the architectural framework meets the operational reality of the trading desk. This phase involves the practical implementation of the evaluation models, the establishment of governance protocols, and the integration of the tiering logic into the firm’s daily trading workflow. Success in execution requires a disciplined, process-oriented approach, supported by the right technology and a clear understanding of roles and responsibilities within the organization.

The process begins with the establishment of a comprehensive and clean dataset. All RFQ interactions must be captured electronically in a structured format. This includes not just the winning quote, but all quotes received, along with timestamps, dealer identities, and the full details of the instrument being traded. This data forms the raw material for the entire performance analysis.

Without a high-integrity data pipeline, any attempt at quantitative tiering will be flawed from the outset. This often requires close collaboration with the firm’s technology team and its EMS/OMS provider to ensure that all necessary data fields are being captured and stored correctly.

![A textured spherical digital asset, resembling a lunar body with a central glowing aperture, is bisected by two intersecting, planar liquidity streams. This depicts institutional RFQ protocol, optimizing block trade execution, price discovery, and multi-leg options strategies with high-fidelity execution within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-optimized-rfq-execution-protocol-dynamic-liquidity-management.jpg)

## The Operational Playbook for Tier Management

A formal, documented playbook for managing the dealer tiers is essential for ensuring consistency, fairness, and transparency. This playbook should serve as the definitive guide for the trading desk, outlining the precise steps for evaluating dealers, assigning them to tiers, and managing the ongoing relationship.

- 
**Initial Onboarding and Baselining** ▴ New dealers should enter a probationary period where their performance is closely monitored but not yet fully integrated into the main [tiering model](https://prime.greeks.live/question/how-can-an-institutions-board-effectively-oversee-the-model-tiering-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). This allows the firm to gather a baseline of performance data across a sufficient number of inquiries before making a formal tier assignment.

- 
**Regular Performance Reviews** ▴ A formal committee, typically comprising the head of trading, senior traders, and representatives from compliance and operations, should meet on a defined schedule (e.g. monthly) to review the output of the dealer scoring model. This meeting provides an opportunity to overlay qualitative judgment on the quantitative data and to formally approve any changes to the tiering structure.

- 
**The Communication Protocol** ▴ The firm must decide on a clear policy for communicating performance feedback to its dealers. Best practice involves providing dealers with a regular, data-driven scorecard of their own performance, often benchmarked against an anonymized peer group. This transparency can help dealers understand where they are underperforming and what they need to do to improve their standing.

- 
**Tier Promotion and Demotion Rules** ▴ The playbook must contain explicit rules governing how a dealer can move between tiers. For example, a dealer might need to maintain a composite score in the top quintile for three consecutive months to be considered for promotion to Tier 1. Conversely, a dealer whose score falls into the bottom quartile for two consecutive months might be automatically demoted.

- 
**A Protocol for Underperformance** ▴ When a dealer is demoted or placed on a “watch list,” there should be a formal process for remediation. This typically involves a direct conversation with the dealer to discuss the performance data and to understand if there are any underlying issues. The dealer is then given a specific timeframe and a clear set of performance targets they must meet to regain their previous status.

![Interconnected, sharp-edged geometric prisms on a dark surface reflect complex light. This embodies the intricate market microstructure of institutional digital asset derivatives, illustrating RFQ protocol aggregation for block trade execution, price discovery, and high-fidelity execution within a Principal's operational framework enabling optimal liquidity](https://options.greeks.live/wp-content/uploads/2025/07/precision-geometric-prisms-reflecting-institutional-digital-asset-derivatives-rfq-price-discovery-and-optimized-execution-market-microstructure.jpg)

## Quantitative Modeling and Data Analysis

The heart of the execution process is the quantitative model that synthesizes raw performance data into a coherent dealer score. This model must be both sophisticated enough to capture the key dimensions of performance and simple enough to be understood and trusted by the traders who use it. A common approach is a multi-factor weighted scoring system.

The table below provides a simplified example of such a model. In this scenario, the firm has decided to give the highest weighting to Price Competitiveness, as its primary goal is cost minimization. Other factors are weighted according to their perceived importance.

| Performance Criterion | Weighting | Dealer A Raw Score | Dealer B Raw Score | Dealer C Raw Score | Dealer A Weighted Score | Dealer B Weighted Score | Dealer C Weighted Score |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Price Competitiveness (bps improvement) | 40% | 2.5 | 1.8 | 3.1 | 1.00 | 0.72 | 1.24 |
| Response Time (ms) | 20% | 150 | 500 | 120 | 0.40 | 0.12 | 0.50 |
| Hit Rate (%) | 15% | 25% | 45% | 15% | 0.38 | 0.68 | 0.23 |
| Hold Time (seconds) | 15% | 30 | 15 | 45 | 0.45 | 0.23 | 0.68 |
| Qualitative Score (1-10) | 10% | 8 | 6 | 9 | 0.08 | 0.06 | 0.09 |
| Composite Score | 100% | N/A | N/A | N/A | 2.31 | 1.81 | 2.74 |

In this model, each raw score would first be normalized (e.g. on a scale of 0 to 1) relative to the entire universe of dealers to allow for the aggregation of different units of measure. The normalized score is then multiplied by its respective weighting to produce a weighted score. The sum of the weighted scores gives the final composite score for each dealer. Based on these scores, Dealer C would rank highest and Dealer B lowest.

The firm could then define score thresholds for each tier, for example, Tier 1 > 2.5, Tier 2 = 2.0-2.5, and Tier 3 < 2.0. This transforms the complex, multi-faceted performance data into a single, actionable output that can be used to drive the RFQ routing logic.

![Two sharp, intersecting blades, one white, one blue, represent precise RFQ protocols and high-fidelity execution within complex market microstructure. Behind them, translucent wavy forms signify dynamic liquidity pools, multi-leg spreads, and volatility surfaces](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-optimized-liquidity-aggregation-principal-prime-os-intelligence-layer.jpg)

## Predictive Scenario Analysis

Consider a large asset manager executing a $50 million block trade in a 10-year corporate bond for a moderately liquid issuer. The portfolio manager has instructed the trading desk to prioritize minimizing market impact while achieving a competitive price. The firm’s dynamic tiering system, which updates dealer scores on a weekly basis using a 60-day rolling window of data, is immediately brought to bear. The EMS automatically pulls the latest composite scores for all approved dealers in this asset class.

Dealer C, with a score of 2.74, is the top-ranked counterparty, showing exceptional price competitiveness and long hold times. Dealer A (2.31) and another dealer, Dealer D (2.45), are also in Tier 1. Dealer B (1.81) has recently been demoted to Tier 3 due to a significant increase in response times and a drop in their hit rate, suggesting a possible change in their trading appetite for corporate credit.

The trading protocol dictates that for trades of this size and sensitivity, the RFQ should initially be sent to a maximum of three Tier 1 dealers. The trader, guided by the system, selects Dealers A, C, and D for the initial inquiry. The RFQ is sent out simultaneously to all three. Dealer C responds in 125 milliseconds with a price that is 3 basis points better than the composite pre-trade benchmark.

Dealer A responds 30 milliseconds later with a price 2.5 basis points better. Dealer D, however, takes over 600 milliseconds to respond and its price is only 1 basis point better. The system flags Dealer D’s slow response time, and this data point will be fed back into the next weekly scoring update.

The trader now has two highly competitive quotes with a 30-second hold time. Given the mandate to minimize impact, the trader decides to execute the full block with Dealer C. The trade is filled cleanly, and the price improvement is logged in the system. In the post-trade analysis, the execution is deemed highly successful. The tiering system performed its function perfectly.

It directed the sensitive order flow to the counterparties who were statistically most likely to provide a superior outcome. It avoided sending the inquiry to Dealer B, who would likely have responded slowly or not at all, and it correctly identified the two most competitive providers in real-time. This single event reinforces the value of the dynamic tiering architecture, demonstrating its ability to translate a strategic framework into tangible, measurable execution alpha.

![A sleek, dark, metallic system component features a central circular mechanism with a radiating arm, symbolizing precision in High-Fidelity Execution. This intricate design suggests Atomic Settlement capabilities and Liquidity Aggregation via an advanced RFQ Protocol, optimizing Price Discovery within complex Market Microstructure and Order Book Dynamics on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-prime-os-high-fidelity-execution-protocol-liquidity-market-microstructure.jpg)

## System Integration and Technological Architecture

The successful execution of a sophisticated dealer tiering strategy is heavily dependent on the underlying technological architecture. The system must be capable of capturing, storing, processing, and acting upon large volumes of trading data in a timely and efficient manner. This requires seamless integration between several key components of the firm’s technology stack.

At the center of the architecture is the Execution Management System (EMS) or a specialized RFQ platform. This is the system that facilitates the sending of RFQs and the receipt of quotes, and it must be configured to log every aspect of these interactions. The key is to ensure the data is captured with high fidelity, including precise timestamps for both outgoing and incoming messages.

The data from the EMS must then flow into a dedicated data analytics platform. This could be a proprietary system built in-house or a third-party business intelligence tool. This platform is responsible for running the quantitative models, calculating the dealer scores, and generating the performance reports and dashboards. It needs to have sufficient processing power to handle the continuous flow of data from the trading desk and to perform the calculations required for a dynamic tiering model.

Finally, the output of the analytics platform, the dealer tiers and scores, must be fed back into the EMS. This creates the crucial feedback loop that allows the tiering logic to influence real-time trading decisions. The EMS should be able to display the tier of each dealer next to their name in the RFQ blotter, providing the trader with immediate, actionable intelligence. In more advanced implementations, the EMS can be configured with rules-based routing logic.

For example, a rule could be created to automatically select the top three Tier 1 dealers for any RFQ in a specific asset class over a certain size threshold. This level of automation reduces the operational burden on the trader and ensures that the firm’s strategic tiering policies are consistently applied.

![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)

## References

- Harris, Larry. “Trading and Exchanges Market Microstructure for Practitioners.” Oxford University Press, 2003.

- O’Hara, Maureen. “Market Microstructure Theory.” Blackwell Publishers, 1995.

- Madhavan, Ananth. “Market Microstructure A Survey.” Journal of Financial Markets, vol. 3, no. 3, 2000, pp. 205-258.

- Bessembinder, Hendrik, and Kumar, Alok. “Liquidity, Information, and Infrequent Trading.” Journal of Financial Economics, vol. 75, no. 3, 2005, pp. 457-493.

- Parlour, Christine A. and Seppi, Duane J. “Liquidity-Based Competition for Order Flow.” The Review of Financial Studies, vol. 16, no. 2, 2003, pp. 301-343.

- Greenwich Associates. “The Future of Fixed-Income Trading Desks.” Market Structure Report, 2021.

- Financial Industry Regulatory Authority (FINRA). “Report on Best Execution and Trading Practices.” 2015.

- Lehalle, Charles-Albert, and Laruelle, Sophie. “Market Microstructure in Practice.” World Scientific Publishing, 2013.

![Modular institutional-grade execution system components reveal luminous green data pathways, symbolizing high-fidelity cross-asset connectivity. This depicts intricate market microstructure facilitating RFQ protocol integration for atomic settlement of digital asset derivatives within a Principal's operational framework, underpinned by a Prime RFQ intelligence layer](https://options.greeks.live/wp-content/uploads/2025/07/modular-high-fidelity-execution-architecture-for-institutional-digital-asset-derivatives-rfq-protocol-integration-and-principals-operational-framework-optimization.jpg)

## Reflection

The architecture of a dealer list is a mirror. It reflects a firm’s understanding of the market, its approach to risk, and its commitment to systematic process. The framework detailed here provides the components for building a sophisticated liquidity sourcing engine. How might these components be assembled within your own operational structure?

What proprietary data, unique to your flow, could be used to refine the models and generate a more precise calibration of counterparty value? The ultimate advantage is found in the continuous refinement of this system, transforming it from a static directory into a living, adaptive component of your firm’s intellectual property. The path to superior execution is paved with superior data, and the tiered dealer list is the system that puts that data to work.

![Interlocking transparent and opaque components on a dark base embody a Crypto Derivatives OS facilitating institutional RFQ protocols. This visual metaphor highlights atomic settlement, capital efficiency, and high-fidelity execution within a prime brokerage ecosystem, optimizing market microstructure for block trade liquidity](https://options.greeks.live/wp-content/uploads/2025/07/modular-framework-for-crypto-derivatives-os-rfq-protocol-aggregation.jpg)

## How Does Your Current System Measure Information Leakage?

A critical, yet notoriously difficult, metric to quantify is the cost of information leakage. While the models presented focus on observable data like price and speed, the true alpha in counterparty selection often lies in identifying dealers who handle sensitive flow with discretion. This requires moving beyond standard TCA. It involves analyzing market impact patterns in the moments after an RFQ is sent but before it is executed.

Does the market consistently move away from you when certain dealers are included in an inquiry? Answering this question requires a dedicated analytical effort, but the insights gained are invaluable. It is the final, and perhaps most important, layer of the tiering architecture.

![Luminous, multi-bladed central mechanism with concentric rings. This depicts RFQ orchestration for institutional digital asset derivatives, enabling high-fidelity execution and optimized price discovery](https://options.greeks.live/wp-content/uploads/2025/07/optimized-digital-asset-derivatives-rfq-protocol-execution-engine.jpg)

## Glossary

<a href="https://prime.greeks.live/area/request-for-quote/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A segmented rod traverses a multi-layered spherical structure, depicting a streamlined Institutional RFQ Protocol. This visual metaphor illustrates optimal Digital Asset Derivatives price discovery, high-fidelity execution, and robust liquidity pool integration, minimizing slippage and ensuring atomic settlement for multi-leg spreads within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-flow-1.jpg)

## Request for Quote

Meaning ▴ A Request for Quote (RFQ), in the context of institutional crypto trading, is a formal process where a prospective buyer or seller of digital assets solicits price quotes from multiple liquidity providers or market makers simultaneously. </a><a href="https://prime.greeks.live/question/how-can-a-tiered-dealer-system-be-dynamically-adjusted-to-market-conditions/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Tiered Dealer

A dynamic dealer tiering system is an adaptive framework for optimizing liquidity access by continuously re-evaluating counterparties. </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">
![Sleek, engineered components depict an institutional-grade Execution Management System. The prominent dark structure represents high-fidelity execution of digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-for-optimized-price-discovery-high-fidelity-execution-and-market-microstructure.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/information-leakage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision-engineered multi-vane system with opaque, reflective, and translucent teal blades. This visualizes Institutional Grade Digital Asset Derivatives Market Microstructure, driving High-Fidelity Execution via RFQ protocols, optimizing Liquidity Pool aggregation, and Multi-Leg Spread management on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-multi-vane-system-illustrating-institutional-digital-asset-derivatives-rfq-protocols-market-microstructure-optimized-liquidity-aggregation-prime-os-high-fidelity-execution.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/trading-desk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated proprietary system module featuring precision-engineered components, symbolizing an institutional-grade Prime RFQ for digital asset derivatives. Its intricate design represents market microstructure analysis, RFQ protocol integration, and high-fidelity execution capabilities, optimizing liquidity aggregation and price discovery for block trades within a multi-leg spread environment](https://options.greeks.live/wp-content/uploads/2025/07/institutional-grade-proprietary-architecture-driving-high-fidelity-digital-asset-derivatives-execution-via-rfq-protocols-and-optimized-market-microstructure-dynamics.jpg)

## Trading Desk

Meaning ▴ A Trading Desk, within the institutional crypto investing and broader financial services sector, functions as a specialized operational unit dedicated to executing buy and sell orders for digital assets, derivatives, and other crypto-native instruments. </a><a href="https://prime.greeks.live/area/liquidity-sourcing/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, institutional grade apparatus, central to a Crypto Derivatives OS, showcases high-fidelity execution. Its RFQ protocol channels extend to a stylized liquidity pool, enabling price discovery across complex market microstructure for capital efficiency within a Principal's operational framework](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-digital-derivatives-prime-os-microstructure-optimization.jpg)

## Liquidity Sourcing

Meaning ▴ Liquidity sourcing in crypto investing refers to the strategic process of identifying, accessing, and aggregating available trading depth and volume across various fragmented venues to execute large orders efficiently. </a><a href="https://prime.greeks.live/area/rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A large, smooth sphere, a textured metallic sphere, and a smaller, swirling sphere rest on an angular, dark, reflective surface. This visualizes a principal liquidity pool, complex structured product, and dynamic volatility surface, representing high-fidelity execution within an institutional digital asset derivatives market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-optimized-market-microstructure-precision.jpg)

## Rfq

Meaning ▴ A Request for Quote (RFQ), in the domain of institutional crypto trading, is a structured communication protocol enabling a prospective buyer or seller to solicit firm, executable price proposals for a specific quantity of a digital asset or derivative from one or more liquidity providers. </a><a href="https://prime.greeks.live/area/dealer-tiering/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Dealer Tiering

Meaning ▴ Dealer tiering in institutional crypto trading refers to the systematic classification of market makers or liquidity providers based on predefined performance metrics and relationships with the trading platform or client. </a><a href="https://prime.greeks.live/area/tiering-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Two robust modules, a Principal's operational framework for digital asset derivatives, connect via a central RFQ protocol mechanism. This system enables high-fidelity execution, price discovery, atomic settlement for block trades, ensuring capital efficiency in market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-protocol-high-fidelity-execution-engine.jpg)

## Tiering System

Meaning ▴ A tiering system is a hierarchical classification structure that categorizes participants, services, or assets based on predefined criteria, often influencing access, pricing, or benefits. </a><a href="https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract geometric planes, translucent teal representing dynamic liquidity pools and implied volatility surfaces, intersect a dark bar. This signifies FIX protocol driven algorithmic trading and smart order routing](https://options.greeks.live/wp-content/uploads/2025/07/optimized-institutional-digital-asset-derivatives-rfq-liquidity-aggregation.jpg)

## Best Execution

Meaning ▴ Best Execution, in the context of cryptocurrency trading, signifies the obligation for a trading firm or platform to take all reasonable steps to obtain the most favorable terms for its clients' orders, considering a holistic range of factors beyond merely the quoted price. </a><a href="https://prime.greeks.live/area/hit-rate/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract, sleek forms represent an institutional-grade Prime RFQ for digital asset derivatives. Interlocking elements denote RFQ protocol optimization and price discovery across dark pools](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-5.jpg)

## Hit Rate

Meaning ▴ In the operational analytics of Request for Quote (RFQ) systems and institutional crypto trading, "Hit Rate" is a quantitative metric that measures the proportion of successfully accepted quotes, submitted by a liquidity provider, that ultimately result in an executed trade by the requesting party. </a><a href="https://prime.greeks.live/area/execution-management-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, pointed object, merging light and dark modular components, embodies advanced market microstructure for digital asset derivatives. Its precise form represents high-fidelity execution, price discovery via RFQ protocols, emphasizing capital efficiency, institutional grade alpha generation](https://options.greeks.live/wp-content/uploads/2025/07/institutional-grade-digital-asset-rfq-execution-system-microstructure.jpg)

## Execution Management System

Meaning ▴ An Execution Management System (EMS) in the context of crypto trading is a sophisticated software platform designed to optimize the routing and execution of institutional orders for digital assets and derivatives, including crypto options, across multiple liquidity venues. </a><a href="https://prime.greeks.live/area/price-competitiveness/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Robust metallic structures, one blue-tinted, one teal, intersect, covered in granular water droplets. This depicts a principal's institutional RFQ framework facilitating multi-leg spread execution, aggregating deep liquidity pools for optimal price discovery and high-fidelity atomic settlement of digital asset derivatives for enhanced capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-optimized-for-high-fidelity-execution.jpg)

## Price Competitiveness

Meaning ▴ Price Competitiveness in crypto markets signifies the capacity of a trading platform or liquidity provider to offer bid and ask prices that are equal to or more favorable than those available from competitors. </a><a href="https://prime.greeks.live/area/price-improvement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract bisected spheres, reflective grey and textured teal, forming an infinity, symbolize institutional digital asset derivatives. Grey represents high-fidelity execution and market microstructure teal, deep liquidity pools and volatility surface data](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocols-for-digital-asset-derivatives-execution.jpg)

## Price Improvement

Meaning ▴ Price Improvement, within the context of institutional crypto trading and Request for Quote (RFQ) systems, refers to the execution of an order at a price more favorable than the prevailing National Best Bid and Offer (NBBO) or the initially quoted price. </a><a href="https://prime.greeks.live/area/dynamic-tiering/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Glossy, intersecting forms in beige, blue, and teal embody RFQ protocol efficiency, atomic settlement, and aggregated liquidity for institutional digital asset derivatives. The sleek design reflects high-fidelity execution, prime brokerage capabilities, and optimized order book dynamics for capital efficiency](https://options.greeks.live/wp-content/uploads/2025/08/precision-engineered-digital-asset-derivatives-execution-via-optimized-rfq-protocols-enhancing-principal-operational-frameworks.jpg)

## Dynamic Tiering

Meaning ▴ Dynamic tiering is a system architecture principle where resources, services, or data are automatically categorized and managed across different performance and cost levels. </a><a href="https://prime.greeks.live/question/how-can-an-institutions-board-effectively-oversee-the-model-tiering-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Tiering Model

Effective board oversight of model tiering requires leveraging the framework as a system for risk-sensitive resource allocation. </a>

**Tags:** [Request for Quote](https://options.greeks.live/area/request-for-quote/), [Trading Desk](https://options.greeks.live/area/trading-desk/), [Market Microstructure](https://options.greeks.live/area/market-microstructure/), [Information Leakage](https://options.greeks.live/area/information-leakage/), [Dynamic Tiering](https://options.greeks.live/area/dynamic-tiering/), [Dealer Tiering](https://options.greeks.live/area/dealer-tiering/)	

## Discover More

- 
### [What Are the Primary Trade-Offs between Price Competitiveness and Information Leakage When Evaluating Dealers?](https://options.greeks.live/question/what-are-the-primary-trade-offs-between-price-competitiveness-and-information-leakage-when-evaluating-dealers/)
![Precision-engineered metallic discs, interconnected by a central spindle, against a deep void, symbolize the core architecture of an Institutional Digital Asset Derivatives RFQ protocol. This setup facilitates private quotation, robust portfolio margin, and high-fidelity execution, optimizing market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-core-infrastructure.jpg)

The core trade-off in dealer evaluation is optimizing execution by balancing competitive pricing against the systemic cost of information leakage.

- 
### [How Does Dealer Tiering Improve Execution Quality in an RFQ System?](https://options.greeks.live/question/how-does-dealer-tiering-improve-execution-quality-in-an-rfq-system/)
![Abstract forms on dark, a sphere balanced by intersecting planes. This signifies high-fidelity execution for institutional digital asset derivatives, embodying RFQ protocols and price discovery within a Prime RFQ. It represents market microstructure, managing latent liquidity and counterparty risk for block trades.](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-platform-microstructure-execution-prime-os.jpg)

Dealer tiering improves RFQ execution by structuring liquidity access to balance price competition with information leakage control.

- 
### [What Are the Technological Prerequisites for Implementing an Effective RFQ Tiering Strategy?](https://options.greeks.live/question/what-are-the-technological-prerequisites-for-implementing-an-effective-rfq-tiering-strategy/)
![An exploded view reveals the precision engineering of an institutional digital asset derivatives trading platform, showcasing layered components for high-fidelity execution and RFQ protocol management. This architecture facilitates aggregated liquidity, optimal price discovery, and robust portfolio margin calculations, minimizing slippage and counterparty risk.](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-execution-engine-microstructure.jpg)

An effective RFQ tiering strategy requires an integrated architecture for data analysis, rule-based routing, and seamless EMS connectivity.

- 
### [How Does the Integration of Machine Learning Change the Role of the Human Trader in the RFQ Process?](https://options.greeks.live/question/how-does-the-integration-of-machine-learning-change-the-role-of-the-human-trader-in-the-rfq-process/)
![Sleek, modular infrastructure for institutional digital asset derivatives trading. Its intersecting elements symbolize integrated RFQ protocols, facilitating high-fidelity execution and precise price discovery across complex multi-leg spreads. This represents a Prime RFQ intelligence layer for optimal capital efficiency and reduced slippage in volatile markets.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-system-optimizing-high-fidelity-block-trade-liquidity-and-multi-leg-spread-precision.jpg)

The integration of machine learning elevates the human trader from a simple executor to a strategic manager of an intelligent quoting system.

- 
### [How Do Pre-Trade Analytics Quantify Information Leakage Risk for a Given Counterparty?](https://options.greeks.live/question/how-do-pre-trade-analytics-quantify-information-leakage-risk-for-a-given-counterparty/)
![A multi-faceted digital asset derivative, precisely calibrated on a sophisticated circular mechanism. This represents a Prime Brokerage's robust RFQ protocol for high-fidelity execution of multi-leg spreads, ensuring optimal price discovery and minimal slippage within complex market microstructure, critical for alpha generation.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-precision-2.jpg)

Pre-trade analytics quantify information leakage risk by modeling and measuring adverse price impact attributable to specific counterparties.

- 
### [How Does the RFQ System Handle Trades during Extreme Market Volatility?](https://options.greeks.live/question/how-does-the-rfq-system-handle-trades-during-extreme-market-volatility/)
![A sleek, multi-layered digital asset derivatives platform highlights a teal sphere, symbolizing a core liquidity pool or atomic settlement node. The perforated white interface represents an RFQ protocol's aggregated inquiry points for multi-leg spread execution, reflecting precise market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-core-execution-system.jpg)

An RFQ system provides a controlled, competitive environment for sourcing liquidity, mitigating the price dislocation and information leakage inherent in volatile public markets.

- 
### [What Are the Best Practices for Creating a Data Driven Dealer Scorecard for Rfq Protocols?](https://options.greeks.live/question/what-are-the-best-practices-for-creating-a-data-driven-dealer-scorecard-for-rfq-protocols/)
![A precision engineered system for institutional digital asset derivatives. Intricate components symbolize RFQ protocol execution, enabling high-fidelity price discovery and liquidity aggregation. This advanced market microstructure facilitates multi-leg spread strategies within a robust prime brokerage operational framework.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-precision-4.jpg)

A data-driven dealer scorecard is an objective performance framework that translates execution data into actionable routing intelligence.

- 
### [How Is the Winner’s Curse Mitigated in a Competitive Rfq Environment for Large Trades?](https://options.greeks.live/question/how-is-the-winners-curse-mitigated-in-a-competitive-rfq-environment-for-large-trades/)
![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. This depicts optimal Price Discovery and Liquidity Aggregation.](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)

The winner's curse is mitigated by a systemic framework of controlled information release and quantitative risk pricing.

- 
### [How Does Counterparty Selection in an RFQ Affect Best Execution?](https://options.greeks.live/question/how-does-counterparty-selection-in-an-rfq-affect-best-execution/)
![Polished, curved surfaces in teal, black, and beige delineate the intricate market microstructure of institutional digital asset derivatives. These distinct layers symbolize segregated liquidity pools, facilitating optimal RFQ protocol execution and high-fidelity execution, minimizing slippage for large block trades and enhancing capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/precision-rfq-protocol-execution-institutional-digital-asset-derivatives-flow.jpg)

Counterparty selection in an RFQ engineers the trade's outcome by controlling information flow to optimize liquidity access and price discovery.

---

## 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": "What Are the Best Practices for Creating Tiered Dealer Lists for RFQs?",
            "item": "https://options.greeks.live/question/what-are-the-best-practices-for-creating-tiered-dealer-lists-for-rfqs/"
        }
    ]
}
```

```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/what-are-the-best-practices-for-creating-tiered-dealer-lists-for-rfqs/"
    },
    "headline": "What Are the Best Practices for Creating Tiered Dealer Lists for RFQs? \u25b4 Question",
    "description": "A tiered dealer list is a dynamic risk framework that translates performance data into optimized liquidity access. \u25b4 Question",
    "url": "https://options.greeks.live/question/what-are-the-best-practices-for-creating-tiered-dealer-lists-for-rfqs/",
    "datePublished": "2025-08-03T17:32:22+00:00",
    "dateModified": "2025-10-24T16:25:49+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/2025/08/precision-engineered-digital-asset-derivatives-execution-via-optimized-rfq-protocols-enhancing-principal-operational-frameworks.jpg",
        "caption": "An abstract sculpture of intersecting, polished forms in beige, deep blue, and teal signifies the intricate architecture of institutional digital asset derivatives. It represents a Principal's robust operational framework facilitating best execution through optimized RFQ protocols and smart order routing. This visual metaphor highlights high-frequency trading capabilities, multi-leg spread precision, and comprehensive portfolio margin management for superior alpha generation and reduced slippage."
    },
    "keywords": [
        "Algorithmic Trading",
        "Best Execution",
        "Counterparty Risk Management",
        "Dealer Tiering",
        "Dynamic Tiering",
        "Execution Management System",
        "Fixed Income Trading",
        "Hit Rate",
        "Information Leakage",
        "Liquidity Sourcing",
        "Market Impact",
        "Market Microstructure",
        "Price Competitiveness",
        "Price Improvement",
        "Quantitative Modeling",
        "Request for Quote",
        "RFQ",
        "Tiering System",
        "Trading Desk"
    ]
}
```

```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"
    }
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "FAQPage",
    "mainEntity": [
        {
            "@type": "Question",
            "name": "What Is The Primary Function Of Dealer Tiering?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "The primary function of dealer tiering is to systematize and optimize the process of bilateral price discovery. It provides a structured mechanism to direct specific types of order flow to the counterparties most likely to provide the best outcome for that particular trade. For large, sensitive, or illiquid orders, this means routing an RFQ to a small, select group of Tier 1 dealers who have earned the right to see that flow through consistent, high-quality pricing and minimal information leakage. For smaller, more liquid, and less sensitive orders, the inquiry can be broadcast to a wider group of Tier 2 and Tier 3 dealers, fostering greater competition without jeopardizing the core objectives of the trade."
            }
        },
        {
            "@type": "Question",
            "name": "How Does Your Current System Measure Information Leakage?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "A critical, yet notoriously difficult, metric to quantify is the cost of information leakage. While the models presented focus on observable data like price and speed, the true alpha in counterparty selection often lies in identifying dealers who handle sensitive flow with discretion. This requires moving beyond standard TCA. It involves analyzing market impact patterns in the moments after an RFQ is sent but before it is executed. Does the market consistently move away from you when certain dealers are included in an inquiry? Answering this question requires a dedicated analytical effort, but the insights gained are invaluable. It is the final, and perhaps most important, layer of the tiering architecture."
            }
        }
    ]
}
```


---

**Original URL:** https://options.greeks.live/question/what-are-the-best-practices-for-creating-tiered-dealer-lists-for-rfqs/
