# What Is the Systemic Impact on Lit Market Spreads When SIs Can No Longer Offer Sub-Tick Pricing? ▴ Question

**Published:** 2025-08-04
**Categories:** Question

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## Concept

The prohibition of [sub-tick pricing](https://prime.greeks.live/question/how-can-tick-size-reductions-affect-the-signal-to-noise-ratio-in-leakage-detection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) for [Systematic Internalisers](https://prime.greeks.live/area/systematic-internalisers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SIs) represents a fundamental architectural recalibration of European equity markets. This was a direct intervention into the operational code of market structure, designed to alter the flow of liquidity and information between private and public execution venues. To comprehend the systemic impact, one must first view the market as an ecosystem of interconnected platforms, each with distinct rules of engagement.

At the center of this ecosystem are the [lit markets](https://prime.greeks.live/area/lit-markets/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) ▴ the regulated exchanges that form the bedrock of public [price discovery](https://prime.greeks.live/area/price-discovery/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). Their function depends on a continuous, transparent stream of orders that collectively establish the value of an asset.

Systematic Internalisers exist as a parallel, proprietary execution pathway. An SI is an investment firm that deals on its own account by executing client orders outside a regulated market or multilateral trading facility (MTF). Before the regulatory adjustment, SIs operated with a significant structural advantage ▴ the ability to price orders in increments smaller than the minimum [tick size](https://prime.greeks.live/area/tick-size/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) mandated for lit exchanges. This capacity for sub-tick pricing allowed them to offer a marginal, yet highly compelling, [price improvement](https://prime.greeks.live/area/price-improvement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) over the public bid or offer.

For an institution’s Smart Order Router (SOR), an algorithm designed to source the best possible execution price, the SI’s offer was mathematically superior. Consequently, a substantial volume of non-toxic, [uninformed order flow](https://prime.greeks.live/area/uninformed-order-flow/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) was systematically diverted away from the lit markets. This diversion was the central issue. Lit [market liquidity providers](https://prime.greeks.live/question/how-can-transaction-cost-analysis-identify-specific-liquidity-providers-causing-market-impact/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), who take risks by posting public quotes, were having the very price signals they generated used against them by SIs who could “free-ride” on this public data without contributing to its formation. The result was a system where price discovery on public venues was potentially subsidized by those who participated in it, while a significant portion of order flow was internalized with minimal contribution to the public good of a robust, transparent price.

> The removal of sub-tick pricing for SIs was an attempt to level the competitive playing field between private and public trading venues.

The systemic challenge this created was a potential degradation of the price discovery process itself. As more [order flow](https://prime.greeks.live/area/order-flow/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) migrates to SIs, the quality and reliability of the public quote can diminish. Spreads on lit markets may widen to compensate [liquidity providers](https://prime.greeks.live/area/liquidity-providers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) for the lower volume and the increased uncertainty. The prohibition of sub-tick quoting for SIs was therefore a direct attempt to re-route this valuable, often uninformed, order flow back to the public exchanges.

The regulatory hypothesis was that by forcing SIs to adhere to the same pricing increments as lit venues, the mathematical incentive for SORs to route to them would be neutralized, leading to a healthier, more robust public market. This action was less about punishing SIs and more about reinforcing the foundational role of the [lit market](https://prime.greeks.live/area/lit-market/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) as the primary engine of price discovery in the European market architecture.

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## Strategy

The regulatory mandate forcing Systematic Internalisers to adhere to the lit market tick size regime triggered a series of strategic recalculations across all major market participants. The core of this strategic shift revolves around the new equilibrium of execution quality, [information leakage](https://prime.greeks.live/area/information-leakage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), and adverse selection. With the removal of the simple, deterministic advantage of [sub-tick price improvement](https://prime.greeks.live/question/how-does-tick-size-influence-the-balance-between-price-discovery-and-trading-costs/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), the decision of where to route an order has become a far more complex equation. The strategies adopted by SIs, institutional clients, and liquidity providers reveal the deeper, second-order effects of this market structure overhaul.

![Sharp, transparent, teal structures and a golden line intersect a dark void. This symbolizes market microstructure for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-precision-execution-leveraging-granular-market-microstructure-intelligence.jpg)

## The Systematic Internaliser’s Strategic Pivot

For SIs, the loss of sub-tick pricing eliminated their most direct competitive tool. Their strategic response has been to pivot toward [other value propositions](https://prime.greeks.live/question/can-vwap-and-other-traditional-benchmarks-still-provide-value-for-block-trades-executed-via-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). This includes offering superior execution speed, reduced [market impact](https://prime.greeks.live/area/market-impact/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) for large orders, and certainty of execution up to a certain size. SIs now compete on the quality of their service and their ability to absorb risk, rather than on a marginal price point.

Their operational model shifts from being a passive price improver to an active risk manager. Some SIs may focus on specific niches, such as handling large-in-scale (LIS) block orders where market impact is the client’s primary concern, or providing liquidity in less-liquid securities where the public quote is wide and unreliable. The game is no longer about being a fraction of a cent better; it is about providing a fundamentally different execution experience.

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## Institutional Order Routing Adaptation

Institutional trading desks and their [Smart Order Routers](https://prime.greeks.live/question/how-do-smart-order-routers-decide-between-sending-an-order-to-a-dark-pool-versus-an-rfq-platform/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SORs) are at the epicenter of this change. The logic governing their execution algorithms required a significant update. Before the change, the SOR’s decision tree was heavily weighted by a single variable ▴ the best available price.

With sub-tick pricing, SIs frequently won. After the change, the decision becomes multi-faceted.

- 
**[Adverse Selection](https://prime.greeks.live/area/adverse-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Modeling** ▴ SORs must now more accurately model the probability of adverse selection on different venues. An order sent to a lit market interacts with a diverse pool of participants, including [high-frequency market makers](https://prime.greeks.live/question/how-do-architectural-interventions-like-speed-bumps-alter-the-behavior-of-high-frequency-market-makers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and informed traders. An order sent to an SI interacts only with the SI’s own capital. The SOR must weigh the explicit cost (the spread) against the implicit cost (the market impact and potential for being “picked off” by an informed trader).

- 
**Liquidity Sourcing Logic** ▴ The SOR must determine the optimal way to “slice” a large order. Does it send small “child” orders to the [lit book](https://prime.greeks.live/area/lit-book/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) to minimize immediate impact, or does it send a larger portion to an SI to guarantee execution without information leakage, even if the price is identical to the public quote? The strategy may change dynamically based on the security’s volatility and the real-time depth on the lit order book.

- 
**[Total Cost Analysis](https://prime.greeks.live/area/total-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA) Recalibration** ▴ The benchmarks for measuring [execution quality](https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) must evolve. A simple comparison to the arrival price is insufficient. TCA models must now incorporate more sophisticated measures of market impact and the opportunity cost of unfilled orders. A fill on an SI at the lit-market price might be superior to a partial fill on the lit market that causes the price to move away.

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## How Does This Impact Lit Market Liquidity Providers?

For market makers on lit exchanges, the impact is complex and, according to some studies, counterintuitive. The initial expectation was that forcing more order flow back to lit markets would tighten spreads and [improve market quality](https://prime.greeks.live/question/how-does-dynamic-weighting-improve-execution-quality-during-market-stress/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). However, research, such as an analysis of the [Swedish stock market](https://prime.greeks.live/question/how-do-single-stock-circuit-breakers-differ-from-market-wide-halts/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), suggests the opposite can occur. The study found that after the SI tick size regime was implemented, quoted spreads, effective spreads, and price impact all increased on the lit market.

This points to a change in the type of flow returning to the public markets. Impatient, potentially more [informed traders](https://prime.greeks.live/area/informed-traders/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), who previously used SIs to execute quickly without being subject to the price-time priority of the lit book, may now be forced to trade more aggressively on the exchange. This influx of informed flow increases the risk for market makers, who in turn widen their spreads to compensate for the higher probability of trading against someone with superior information (adverse selection). The “uninformed” flow that SIs previously captured, which is beneficial for market makers, may not return in the same volume, leading to a net degradation of lit [market quality](https://prime.greeks.live/area/market-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite).

> The removal of sub-tick pricing forced a system-wide re-evaluation of execution strategy, moving beyond price alone to a more complex calculus of risk, impact, and certainty.

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## Comparative Strategic Dynamics Pre and Post Regulation

The table below outlines the primary strategic considerations for an institutional trader before and after the elimination of sub-tick pricing for SIs.

| Strategic Dimension | Pre-Regulation Environment (SIs have Sub-Tick) | Post-Regulation Environment (SIs on Tick) |
| --- | --- | --- |
| Primary SOR Logic | Route to the venue with the best nominal price. SIs frequently win due to marginal price improvement. | Balance spread, depth, probability of fill, and potential market impact. Price is no longer the sole determinant. |
| SI Value Proposition | Guaranteed, marginal price improvement. | Certainty of execution, reduced information leakage, and potential for size absorption. |
| Lit Market Maker Risk | Lower adverse selection risk as SIs filter off a mix of flow. | Potentially higher adverse selection risk as more impatient, informed flow is forced onto the lit exchange. |
| TCA Focus | Emphasis on achieving a price better than the public quote (Price Improvement). | Emphasis on minimizing total cost, including market impact and opportunity cost. |

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## Execution

The transition to a market where Systematic Internalisers are bound by the same tick size constraints as lit venues necessitates a granular re-engineering of execution protocols. For an institutional [trading desk](https://prime.greeks.live/area/trading-desk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), this is not a theoretical exercise; it is an operational imperative. The architecture of [Smart Order](https://prime.greeks.live/question/can-a-smart-order-router-effectively-blend-rfq-and-dark-pool-strategies-for-a-single-large-order/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Routers (SORs), the quantitative models underpinning execution algorithms, and the very workflow of the trading process must be dismantled and reassembled to function optimally in this new environment.

The ultimate goal remains unchanged ▴ to achieve high-fidelity execution that minimizes [total cost](https://prime.greeks.live/area/total-cost/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and aligns with the portfolio manager’s intent. The methods for achieving that goal, however, require a profound overhaul.

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## The Operational Playbook a Guide for the Modern Trading Desk

Adapting to the post-sub-tick world requires a systematic, step-by-step approach to redesigning the execution process. The following playbook outlines the critical actions for a trading desk to ensure its execution architecture is fit for purpose.

- 
**SOR Logic Deconstruction and Recalibration** ▴ The first step is a full audit of the SOR’s routing table and decision logic.

<li>**Tiering Venues by Attributes** ▴ Venues should be tiered based on more than just the quoted price. They must be scored on a weighted average of multiple attributes ▴ available depth, historical fill rates, average execution speed, and a quantitative measure of adverse selection (post-trade price reversion). SIs and lit markets will have very different profiles on these metrics.

- **Implementing Dynamic Logic** ▴ The SOR’s logic must become dynamic. For a small, passive order in a liquid stock, it might prioritize the lit market to capture the spread. For a larger, more urgent order, it might prioritize an SI to avoid information leakage, even at the same price. This logic should adapt in real-time based on market volatility and the state of the order book.

</li>
- 
**Market Impact Model Refinement** ▴ Standard market impact models must be updated.

<li>**Venue-Specific Impact** ▴ The model must differentiate the impact of executing on a lit market versus an SI. An execution on a lit market directly consumes liquidity and is visible to all participants, leading to a higher beta for market impact. An execution against an SI is a bilateral transaction with theoretically zero immediate impact, though there may be secondary effects if the SI subsequently hedges its position.

- **Informed Flow Probability** ▴ Incorporate a probabilistic overlay that estimates the likelihood of [informed traders being](https://prime.greeks.live/question/what-is-the-role-of-informed-traders-in-the-price-discovery-process-across-lit-and-dark-venues/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) active in a given stock at a given time. During periods of high probability, the SOR should be programmed to favor venues with [lower adverse selection](https://prime.greeks.live/question/to-what-extent-does-the-increased-capital-efficiency-of-var-justify-its-lower-predictability-for-a-trading-desk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) risk, such as SIs.

</li>
- 
**TCA Framework Enhancement** ▴ The measurement of success must be refined.

<li>**Beyond Implementation Shortfall** ▴ While Implementation Shortfall remains a core metric, the TCA framework must also capture the nuances of the new environment. This includes measuring “spread capture” on passive orders and “impact alpha” on aggressive orders.

- **Benchmarking Against SI Liquidity** ▴ A new benchmark should be considered ▴ the “SI-Equivalent Price.” This would measure the execution quality not just against the public quote, but against the price that could have been achieved via an SI for an order of equivalent size.

</li>

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## Quantitative Modeling and Data Analysis

The strategic adjustments described must be grounded in rigorous quantitative analysis. The following table presents a hypothetical model of how key market quality metrics could shift on a [lit exchange](https://prime.greeks.live/area/lit-exchange/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) following the prohibition of SI sub-tick pricing, based on the findings of academic research. The scenario assumes a liquid, large-cap stock and models the impact of a rerouting of impatient, informed order flow from SIs to the lit market.

| Metric | Pre-Regulation State | Post-Regulation State | Systemic Rationale |
| --- | --- | --- | --- |
| Quoted Spread | 1.5 bps | 2.0 bps | Market makers widen spreads to compensate for increased adverse selection risk from informed flow no longer being absorbed by SIs. |
| Effective Spread | 1.2 bps | 1.8 bps | The actual cost paid by liquidity demanders increases as they are more likely to be executing against a wider quote. |
| Price Impact (5-min post-trade) | 0.5 bps | 0.9 bps | The permanent impact of a trade increases, suggesting that trades are now, on average, more informative. This is consistent with informed traders being forced onto the lit exchange. |
| SI Market Share (for orders < SMS) | 35% | 25% | Without the sub-tick advantage, some portion of the order flow naturally returns to the lit book, though SIs retain significant volume due to other value propositions. |

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## Predictive Scenario Analysis a Large Order Execution

Consider a portfolio manager’s directive to a trading desk ▴ “Buy 200,000 shares of a liquid FTSE 100 stock, with a benchmark of the [arrival price](https://prime.greeks.live/area/arrival-price/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). The goal is to minimize slippage, but we need the order completed within the next hour.”

In the **pre-regulation environment**, the SOR’s primary objective would be to scan for sub-tick price improvement. The execution would likely have proceeded as follows ▴ The SOR would immediately identify multiple SIs offering to fill portions of the order at prices 0.1 basis points better than the current public offer. It would route approximately 30-40% of the order (70,000 shares) to these SIs in a series of rapid, successive fills. This action would be silent to the broader market.

The remaining 130,000 shares would be worked on the lit market through a passive-aggressive algorithm, placing passive bids just inside the spread and crossing the spread when liquidity appeared. The final TCA report would show significant price improvement on the SI fills, and the overall slippage versus arrival price would be minimal.

In the **post-regulation environment**, the SOR’s calculus is entirely different. The SIs are now quoting at the same price as the lit market offer. The SOR must now weigh the certainty of a fill at an SI against the [potential market impact](https://prime.greeks.live/question/how-does-the-net-to-gross-ratio-impact-the-potential-future-exposure-calculation-under-the-basel-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) of hitting the lit book. The execution might look like this ▴ The SOR’s pre-trade analysis flags the order’s size as significant enough to cause market impact.

To mitigate information leakage, it routes an initial 50,000 shares (25% of the order) to a trusted SI who has a strong track record of handling size without hedging aggressively. This guarantees a fill at the current offer price with no information leakage. Simultaneously, the SOR begins to work the remaining 150,000 shares on the lit markets. It cannot rely on passive fills alone due to the time constraint.

It must aggressively take liquidity from the offer side of the book. This action is visible to all market participants. High-frequency [market makers](https://prime.greeks.live/area/market-makers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) detect the persistent buying pressure and begin to shade their own quotes higher. The price of the stock begins to drift upwards.

The final TCA report shows zero price improvement, and the slippage versus the original arrival price is higher than in the previous scenario. The execution on the SI is shown to have been valuable, because it reduced the amount that needed to be bought on the lit market, thereby containing the total market impact.

![Abstract sculpture with intersecting angular planes and a central sphere on a textured dark base. This embodies sophisticated market microstructure and multi-venue liquidity aggregation for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-institutional-digital-asset-derivatives-rfq-execution-2.jpg)

## System Integration and Technological Architecture

The execution strategies detailed above are only possible with the right technological foundation. The core system that requires modification is the SOR, which sits at the heart of the firm’s Execution Management System (EMS). The integration points are critical.

- 
**FIX Protocol Adjustments** ▴ While the core FIX protocol for order routing does not change, the way it is used does. Firms may begin to use specific FIX tags more intelligently. For example, the HandlInst tag could be used to pass more complex instructions to a broker’s algorithm, specifying how to balance lit market versus SI execution. Custom tags could even be developed between a firm and its SI partners to signal the desired level of risk transfer.

- 
**Market Data Consumption** ▴ The system’s market data infrastructure must be capable of consuming and processing not just the top-of-book quote (Level 1), but full depth-of-book data (Level 2) from all relevant lit markets. It must also be able to ingest the proprietary quote streams from SIs. The SOR’s logic engine needs to process this consolidated view of liquidity in real-time to make its routing decisions.

- 
**API-Driven Liquidity** ▴ Many SIs offer liquidity via private APIs in addition to standard FIX connectivity. The firm’s technology stack must be able to integrate with these APIs to access the full spectrum of available liquidity and to receive richer data on the conditions of a potential fill (e.g. guaranteed size, risk-transfer price). This requires a flexible and robust software architecture capable of managing multiple connection protocols simultaneously.

![A precision mechanism with a central circular core and a linear element extending to a sharp tip, encased in translucent material. This symbolizes an institutional RFQ protocol's market microstructure, enabling high-fidelity execution and price discovery for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-institutional-digital-asset-derivatives-rfq-execution-engine-microstructure-facilitating-optimal-price-discovery-and-best-execution.jpg)

## References

- Deutsche Bank Autobahn. (2018). MiFID II ▴ Systematic Internalisers ▴ Tick Sizes and Price Improvement ▴ Responses to ESMA Consultation.

- Larsson, A. & Westin, E. (2021). Does the tick size regime on systematic internalisers improve market quality?. DiVA portal.

- European Securities and Markets Authority. (2018). ESMA agrees to limit the application of tick sizes to systematic internalisers quotes for shares and depositary receipts.

- Larsson, A. & Westin,E. (2021). Does the tick size regime on systematic internalisers improve market quality? ▴ An Empirical Analysis on the Swedish Stock Market. DiVA portal.

- European Securities and Markets Authority. (2018). Final Report ▴ Draft regulatory technical standards amending Delegated Regulation (EU) 2017/587 (RTS 1) on the tick size regime for SIs.

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## Reflection

![Central teal cylinder, representing a Prime RFQ engine, intersects a dark, reflective, segmented surface. This abstractly depicts institutional digital asset derivatives price discovery, ensuring high-fidelity execution for block trades and liquidity aggregation within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-core-framework.jpg)

## Recalibrating the Market’s Operating System

The removal of sub-tick pricing for Systematic Internalisers was more than a regulatory update; it was a targeted intervention in the market’s core processing logic. The data suggests this architectural change has produced complex, even counterintuitive, results. Spreads on lit markets have not universally tightened, and the very nature of what constitutes “market quality” has been brought into sharper focus.

This reveals a critical truth for any market participant ▴ understanding the explicit rules is merely the entry point. True operational advantage comes from deeply modeling the second-order consequences of those rules ▴ the behavioral adaptations of every other actor in the system.

As you assess your own execution framework, consider the degree to which it is merely compliant with the rules versus being truly optimized for the system the rules have created. Is your SOR making decisions based on a static view of price, or is it dynamically weighing the intricate risks of information leakage and adverse selection? The prohibition of sub-tick pricing did not provide a simple answer. Instead, it posed a more profound question ▴ how do you build an execution system that is intelligent enough to navigate a market that is constantly, and systemically, adapting?

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## Glossary

<a href="https://prime.greeks.live/area/systematic-internalisers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![An intricate mechanical assembly reveals the market microstructure of an institutional-grade RFQ protocol engine. It visualizes high-fidelity execution for digital asset derivatives block trades, managing counterparty risk and multi-leg spread strategies within a liquidity pool, embodying a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-architecture.jpg)

## Systematic Internalisers

Meaning ▴ A market participant, typically a broker-dealer, systematically executing client orders against its own inventory or other client orders off-exchange, acting as principal. </a><a href="https://prime.greeks.live/question/how-can-tick-size-reductions-affect-the-signal-to-noise-ratio-in-leakage-detection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Internal hard drive mechanics, with a read/write head poised over a data platter, symbolize the precise, low-latency execution and high-fidelity data access vital for institutional digital asset derivatives. This embodies a Principal OS architecture supporting robust RFQ protocols, enabling atomic settlement and optimized liquidity aggregation within complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-precision-execution-system-microstructure.jpg)

## Sub-Tick Pricing

A tick size reduction elevates the market's noise floor, compelling leakage detection systems to evolve from spotting anomalies to modeling systemic patterns. </a><a href="https://prime.greeks.live/area/price-discovery/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, metallic platform features a sharp blade resting across its central dome. This visually represents the precision of institutional-grade digital asset derivatives RFQ execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-precision-1.jpg)

## Price Discovery

Meaning ▴ Price discovery is the continuous, dynamic process by which the market determines the fair value of an asset through the collective interaction of supply and demand. </a><a href="https://prime.greeks.live/area/lit-markets/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Lit Markets

Meaning ▴ Lit Markets are centralized exchanges or trading venues characterized by pre-trade transparency, where bids and offers are publicly displayed in an order book prior to execution. </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">
![A stacked, multi-colored modular system representing an institutional digital asset derivatives platform. The top unit facilitates RFQ protocol initiation and dynamic price discovery](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-15.jpg)

## Price Improvement

Meaning ▴ Price improvement denotes the execution of a trade at a more advantageous price than the prevailing National Best Bid and Offer (NBBO) at the moment of order submission. </a><a href="https://prime.greeks.live/area/tick-size/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central toroidal structure and intricate core are bisected by two blades: one algorithmic with circuits, the other solid. This symbolizes an institutional digital asset derivatives platform, leveraging RFQ protocols for high-fidelity execution and price discovery](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-execution-hub-integrating-algorithmic-intelligence-for-high-fidelity-price-discovery-and-liquidity-aggregation.jpg)

## Tick Size

Meaning ▴ Tick Size defines the minimum permissible price increment for a financial instrument on an exchange, establishing the smallest unit by which a security's price can change or an order can be placed. </a><a href="https://prime.greeks.live/question/how-can-transaction-cost-analysis-identify-specific-liquidity-providers-causing-market-impact/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Market Liquidity Providers

TCA identifies impactful LPs by attributing execution slippage and price reversion to specific counterparties using granular fill data. </a><a href="https://prime.greeks.live/area/uninformed-order-flow/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Two sleek, abstract forms, one dark, one light, are precisely stacked, symbolizing a multi-layered institutional trading system. This embodies sophisticated RFQ protocols, high-fidelity execution, and optimal liquidity aggregation for digital asset derivatives, ensuring robust market microstructure and capital efficiency within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-grade-digital-asset-derivatives-platform-architecture-high-fidelity-execution-protocols-and-liquidity-aggregation.jpg)

## Uninformed Order Flow

Meaning ▴ Uninformed Order Flow represents transactional activity originating from participants who do not possess private, actionable information regarding near-term price movements or fundamental value discrepancies. </a><a href="https://prime.greeks.live/area/liquidity-providers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A layered, spherical structure reveals an inner metallic ring with intricate patterns, symbolizing market microstructure and RFQ protocol logic. A central teal dome represents a deep liquidity pool and precise price discovery, encased within robust institutional-grade infrastructure for high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-prime-os-orchestrating-rfq-protocols-for-high-fidelity-execution-and-multi-asset-liquidity.jpg)

## Liquidity Providers

Meaning ▴ Liquidity Providers are market participants, typically institutional entities or sophisticated trading firms, that facilitate efficient market operations by continuously quoting bid and offer prices for financial instruments. </a><a href="https://prime.greeks.live/area/order-flow/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision-engineered, stacked components embody a Principal OS for institutional digital asset derivatives. This multi-layered structure visually represents market microstructure elements within RFQ protocols, ensuring high-fidelity execution and liquidity aggregation](https://options.greeks.live/wp-content/uploads/2025/07/principal-os-architecture-for-institutional-digital-asset-derivatives-rfq.jpg)

## Order Flow

Meaning ▴ Order Flow represents the real-time sequence of executable buy and sell instructions transmitted to a trading venue, encapsulating the continuous interaction of market participants' supply and demand. </a><a href="https://prime.greeks.live/area/lit-market/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated metallic mechanism with integrated translucent teal pathways on a dark background. This abstract visualizes the intricate market microstructure of an institutional digital asset derivatives platform, specifically the RFQ engine facilitating private quotation and block trade execution](https://options.greeks.live/wp-content/uploads/2025/07/systemic-framework-for-institutional-digital-asset-derivatives-rfq-price-discovery-and-atomic-settlement.jpg)

## Lit Market

Meaning ▴ A lit market is a trading venue providing mandatory pre-trade transparency. </a><a href="https://prime.greeks.live/question/how-does-tick-size-influence-the-balance-between-price-discovery-and-trading-costs/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision internal mechanism for 'Institutional Digital Asset Derivatives' 'Prime RFQ'. White casing holds dark blue 'algorithmic trading' logic and a teal 'multi-leg spread' module](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-engine-high-fidelity-execution-liquidity-aggregation.jpg)

## Sub-Tick Price Improvement

Tick size architects the market's pricing grid, balancing price discovery resolution against execution costs. </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">
![A polished, dark, reflective surface, embodying market microstructure and latent liquidity, supports clear crystalline spheres. These symbolize price discovery and high-fidelity execution within an institutional-grade RFQ protocol for digital asset derivatives, reflecting implied volatility and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-system-1.jpg)

## Information Leakage

Meaning ▴ Information leakage denotes the unintended or unauthorized disclosure of sensitive trading data, often concerning an institution's pending orders, strategic positions, or execution intentions, to external market participants. </a><a href="https://prime.greeks.live/question/can-vwap-and-other-traditional-benchmarks-still-provide-value-for-block-trades-executed-via-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A high-fidelity institutional Prime RFQ engine, with a robust central mechanism and two transparent, sharp blades, embodies precise RFQ protocol execution for digital asset derivatives. It symbolizes optimal price discovery, managing latent liquidity and minimizing slippage for multi-leg spread strategies](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-precision-execution-1.jpg)

## Other Value Propositions

VWAP provides an essential system benchmark, enabling rigorous post-trade analysis of RFQ-executed block trades. </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">
![Polished metallic disc on an angled spindle represents a Principal's operational framework. This engineered system ensures high-fidelity execution and optimal price discovery for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/08/high-fidelity-digital-asset-derivatives-rfq-execution-platform.jpg)

## Market Impact

Meaning ▴ Market Impact refers to the observed change in an asset's price resulting from the execution of a trading order, primarily influenced by the order's size relative to available liquidity and prevailing market conditions. </a><a href="https://prime.greeks.live/question/how-do-smart-order-routers-decide-between-sending-an-order-to-a-dark-pool-versus-an-rfq-platform/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![An institutional grade RFQ protocol nexus, where two principal trading system components converge. A central atomic settlement sphere glows with high-fidelity execution, symbolizing market microstructure optimization for digital asset derivatives via Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-microstructure-2.jpg)

## Smart Order Routers

A Smart Order Router routes to dark pools for anonymity and price improvement, pivoting to RFQs for execution certainty in large or illiquid trades. </a><a href="https://prime.greeks.live/question/how-do-architectural-interventions-like-speed-bumps-alter-the-behavior-of-high-frequency-market-makers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated apparatus, potentially a price discovery or volatility surface calibration tool. A blue needle with sphere and clamp symbolizes high-fidelity execution pathways and RFQ protocol integration within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-institutional-digital-asset-derivatives-execution.jpg)

## High-Frequency Market Makers

Architectural interventions like speed bumps alter HFT behavior by shifting competition from pure latency to predictive analytics and strategic timing. </a><a href="https://prime.greeks.live/area/adverse-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A polished, two-toned surface, representing a Principal's proprietary liquidity pool for digital asset derivatives, underlies a teal, domed intelligence layer. This visualizes RFQ protocol dynamism, enabling high-fidelity execution and price discovery for Bitcoin options and Ethereum futures](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-digital-asset-derivatives-rfq-platform-intelligence-layer.jpg)

## Adverse Selection

Meaning ▴ Adverse selection describes a market condition characterized by information asymmetry, where one participant possesses superior or private knowledge compared to others, leading to transactional outcomes that disproportionately favor the informed party. </a><a href="https://prime.greeks.live/area/lit-book/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A transparent sphere, representing a granular digital asset derivative or RFQ quote, precisely balances on a proprietary execution rail. This symbolizes high-fidelity execution within complex market microstructure, driven by rapid price discovery from an institutional-grade trading engine, optimizing capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-precision-1.jpg)

## Lit Book

Meaning ▴ A lit book represents an order book where all submitted orders, including their price and size, are publicly visible to all market participants in real-time. </a><a href="https://prime.greeks.live/area/total-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Interconnected metallic rods and a translucent surface symbolize a sophisticated RFQ engine for digital asset derivatives. This represents the intricate market microstructure enabling high-fidelity execution of block trades and multi-leg spreads, optimizing capital efficiency within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-microstructure-1.jpg)

## Total Cost Analysis

Meaning ▴ Total Cost Analysis (TCA) represents a comprehensive quantitative framework for evaluating all explicit and implicit costs associated with a trade lifecycle. </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 cutaway view reveals the intricate core of an institutional-grade digital asset derivatives execution engine. The central price discovery aperture, flanked by pre-trade analytics layers, represents high-fidelity execution capabilities for multi-leg spread and private quotation via RFQ protocols for Bitcoin options](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-prime-os-rfq-protocol-engine-for-high-fidelity-execution-and-price-discovery-on-volatility-surface.jpg)

## Execution Quality

Meaning ▴ Execution Quality quantifies the efficacy of an order's fill, assessing how closely the achieved trade price aligns with the prevailing market price at submission, alongside consideration for speed, cost, and market impact. </a><a href="https://prime.greeks.live/question/how-does-dynamic-weighting-improve-execution-quality-during-market-stress/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Smooth, reflective, layered abstract shapes on dark background represent institutional digital asset derivatives market microstructure. This depicts RFQ protocols, facilitating liquidity aggregation, high-fidelity execution for multi-leg spreads, price discovery, and Principal's operational framework efficiency](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-multi-leg-spreads.jpg)

## Improve Market Quality

Dynamic weighting enhances execution by transforming a static algorithm into an adaptive system that mitigates risk during market stress. </a><a href="https://prime.greeks.live/question/how-do-single-stock-circuit-breakers-differ-from-market-wide-halts/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A multi-faceted crystalline form with sharp, radiating elements centers on a dark sphere, symbolizing complex market microstructure. This represents sophisticated RFQ protocols, aggregated inquiry, and high-fidelity execution across diverse liquidity pools, optimizing capital efficiency for institutional digital asset derivatives within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/rfq-protocols-for-institutional-digital-asset-derivatives-price-discovery.jpg)

## Swedish Stock Market

Single-stock breakers manage localized volatility; market-wide halts address systemic, panic-driven risk. </a><a href="https://prime.greeks.live/area/informed-traders/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A multifaceted, luminous abstract structure against a dark void, symbolizing institutional digital asset derivatives market microstructure. Its sharp, reflective surfaces embody high-fidelity execution, RFQ protocol efficiency, and precise price discovery](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-trading-protocol-architecture-optimizing-high-fidelity-rfq-execution-and-latent-liquidity-discovery.jpg)

## Informed Traders

Meaning ▴ Informed Traders are market participants who possess or derive proprietary insights from non-public or superiorly processed data, enabling them to anticipate future price movements with a higher probability than the general market. </a><a href="https://prime.greeks.live/area/market-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Intersecting transparent and opaque geometric planes, symbolizing the intricate market microstructure of institutional digital asset derivatives. Visualizes high-fidelity execution and price discovery via RFQ protocols, demonstrating multi-leg spread strategies and dark liquidity for capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-market-microstructure-architecture.jpg)

## Market Quality

Meaning ▴ Market Quality quantifies the operational efficacy and structural integrity of a trading venue, encompassing factors such as liquidity depth, bid-ask spread tightness, price discovery efficiency, and the resilience of execution against adverse selection. </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">
![Polished metallic disks, resembling data platters, with a precise mechanical arm poised for high-fidelity execution. This embodies an institutional digital asset derivatives platform, optimizing RFQ protocol for efficient price discovery, managing market microstructure, and leveraging a Prime RFQ intelligence layer to minimize execution latency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-precision-execution-via-advanced-rfq-protocols-and-prime-os-intelligence-layer-for-optimal-market-microstructure.jpg)

## Trading Desk

Meaning ▴ A Trading Desk represents a specialized operational system within an institutional financial entity, designed for the systematic execution, risk management, and strategic positioning of proprietary capital or client orders across various asset classes, with a particular focus on the complex and nascent digital asset derivatives landscape. </a><a href="https://prime.greeks.live/question/can-a-smart-order-router-effectively-blend-rfq-and-dark-pool-strategies-for-a-single-large-order/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Stacked, distinct components, subtly tilted, symbolize the multi-tiered institutional digital asset derivatives architecture. Layers represent RFQ protocols, private quotation aggregation, core liquidity pools, and atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/layered-institutional-digital-asset-derivatives-rfq-protocols-optimizing-principal-execution-management-systems-for-best-execution.jpg)

## Smart Order

A Smart Order Router systematically blends dark pool anonymity with RFQ certainty to minimize impact and secure liquidity for large orders. </a><a href="https://prime.greeks.live/area/total-cost/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Intersecting translucent planes with central metallic nodes symbolize a robust Institutional RFQ framework for Digital Asset Derivatives. This architecture facilitates multi-leg spread execution, optimizing price discovery and capital efficiency within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-framework.jpg)

## Total Cost

Meaning ▴ Total Cost quantifies the comprehensive expenditure incurred across the entire lifecycle of a financial transaction, encompassing both explicit and implicit components. </a><a href="https://prime.greeks.live/question/to-what-extent-does-the-increased-capital-efficiency-of-var-justify-its-lower-predictability-for-a-trading-desk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precise metallic cross, symbolizing principal trading and multi-leg spread structures, rests on a dark, reflective market microstructure surface. Glowing algorithmic trading pathways illustrate high-fidelity execution and latency optimization for institutional digital asset derivatives via private quotation](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-execution-architecture.jpg)

## Lower Adverse Selection

VaR's capital efficiency is justified only when integrated into a framework that uses stress testing and ES to manage its predictability gaps. </a><a href="https://prime.greeks.live/question/what-is-the-role-of-informed-traders-in-the-price-discovery-process-across-lit-and-dark-venues/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Robust institutional Prime RFQ core connects to a precise RFQ protocol engine. Multi-leg spread execution blades propel a digital asset derivative target, optimizing price discovery](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-proto-insti-digital-asset-derivs-hi-fi-exec-capital-effi-risk-mgmt.jpg)

## Informed Traders Being

Informed traders use lit venues for speed and dark venues for stealth, driving price discovery by strategically revealing private information. </a><a href="https://prime.greeks.live/area/lit-exchange/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A transparent geometric object, an analogue for multi-leg spreads, rests on a dual-toned reflective surface. Its sharp facets symbolize high-fidelity execution, price discovery, and market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-digital-asset-derivatives-high-fidelity-execution.jpg)

## Lit Exchange

Meaning ▴ A Lit Exchange is a regulated trading venue where bid and offer prices, along with corresponding order sizes, are publicly displayed in real-time within a central limit order book, facilitating transparent price discovery and enabling direct interaction with visible liquidity for digital asset derivatives. </a><a href="https://prime.greeks.live/area/arrival-price/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A luminous central hub, representing a dynamic liquidity pool, is bisected by two transparent, sharp-edged planes. This visualizes intersecting RFQ protocols and high-fidelity algorithmic execution within institutional digital asset derivatives market microstructure, enabling precise price discovery](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-execution-protocols-microstructure-engine.jpg)

## Arrival Price

Meaning ▴ The Arrival Price represents the market price of an asset at the precise moment an order instruction is transmitted from a Principal's system for execution. </a><a href="https://prime.greeks.live/question/how-does-the-net-to-gross-ratio-impact-the-potential-future-exposure-calculation-under-the-basel-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central rod, symbolizing an RFQ inquiry, links distinct liquidity pools and market makers. A transparent disc, an execution venue, facilitates price discovery](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-protocol-execution-optimization.jpg)

## Potential Market Impact

The Net-to-Gross Ratio calibrates Potential Future Exposure by scaling it to the measured effectiveness of portfolio netting agreements. </a><a href="https://prime.greeks.live/area/market-makers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Geometric planes, light and dark, interlock around a central hexagonal core. This abstract visualization depicts an institutional-grade RFQ protocol engine, optimizing market microstructure for price discovery and high-fidelity execution of digital asset derivatives including Bitcoin options and multi-leg spreads within a Prime RFQ framework, ensuring atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-architecture.jpg)

## Market Makers

Meaning ▴ Market Makers are financial entities that provide liquidity to a market by continuously quoting both a bid price (to buy) and an ask price (to sell) for a given financial instrument. </a>

**Tags:** [Systematic Internaliser](https://options.greeks.live/area/systematic-internaliser/), [Price Discovery](https://options.greeks.live/area/price-discovery/), [Total Cost](https://options.greeks.live/area/total-cost/), [Order Flow](https://options.greeks.live/area/order-flow/), [Trading Desk](https://options.greeks.live/area/trading-desk/), [Total Cost Analysis](https://options.greeks.live/area/total-cost-analysis/)	

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### [How Does the Rise of Systematic Internalisers and Periodic Auctions Affect Best Execution Obligations?](https://options.greeks.live/question/how-does-the-rise-of-systematic-internalisers-and-periodic-auctions-affect-best-execution-obligations/)
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The rise of SIs and periodic auctions fragments liquidity, demanding a dynamic, evidence-based best execution framework.

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### [What Are the Primary Trade-Offs between Price Improvement and Execution Certainty in Opaque Venues?](https://options.greeks.live/question/what-are-the-primary-trade-offs-between-price-improvement-and-execution-certainty-in-opaque-venues/)
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The core trade-off in opaque venues is accepting execution uncertainty to gain potential price improvement.

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### [Could the Rise of Systematic Internalisers Lead to a Permanent Two-Tiered European Equity Market?](https://options.greeks.live/question/could-the-rise-of-systematic-internalisers-lead-to-a-permanent-two-tiered-european-equity-market/)
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The rise of Systematic Internalisers has cemented a permanent, two-tiered European equity market by design.

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### [How Do Systematic Internalisers Impact Price Discovery on Lit Exchanges?](https://options.greeks.live/question/how-do-systematic-internalisers-impact-price-discovery-on-lit-exchanges/)
![A symmetrical, star-shaped Prime RFQ engine with four translucent blades symbolizes multi-leg spread execution and diverse liquidity pools. Its central core represents price discovery for aggregated inquiry, ensuring high-fidelity execution within a secure market microstructure via smart order routing for block trades.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-prime-os-1.jpg)

Systematic Internalisers impact price discovery by executing trades bilaterally, fragmenting order flow from lit exchanges.

- 
### [How Does the Rise of Systematic Internalisers Change the Strategic Considerations for Best Execution in Europe?](https://options.greeks.live/question/how-does-the-rise-of-systematic-internalisers-change-the-strategic-considerations-for-best-execution-in-europe/)
![A central Prime RFQ core powers institutional digital asset derivatives. Translucent conduits signify high-fidelity execution and smart order routing for RFQ block trades. Peripheral modules symbolize aggregated liquidity pools, enabling precise price discovery, mitigating counterparty risk, and optimizing portfolio margin.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-liquidity-aggregation-engine.jpg)

The rise of Systematic Internalisers reframes European best execution from a public market quest to a sophisticated process of sourcing private, principal liquidity with demonstrable price improvement.

- 
### [How Do Dark Pools Affect Algorithmic Trading Strategies?](https://options.greeks.live/question/how-do-dark-pools-affect-algorithmic-trading-strategies/)
![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)

Dark pools force algorithms to evolve from simple order routers into intelligent liquidity-seeking systems that navigate a fragmented market.

- 
### [How Do Dark Pools Affect Price Discovery in Lit Markets?](https://options.greeks.live/question/how-do-dark-pools-affect-price-discovery-in-lit-markets/)
![A slender metallic probe extends between two curved surfaces. This abstractly illustrates high-fidelity execution for institutional digital asset derivatives, driving price discovery within market microstructure. It represents Prime RFQ protocol precision navigating dark liquidity for best execution and capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/precision-instrument-navigating-institutional-digital-asset-derivatives-rfq-protocols-for-optimal-price-discovery-and-high-fidelity-execution.jpg)

Dark pools fragment order flow, which can degrade public price signals while offering large traders a low-impact execution venue.

- 
### [How Do Dark Pools Affect Adverse Selection for Institutional Traders?](https://options.greeks.live/question/how-do-dark-pools-affect-adverse-selection-for-institutional-traders/)
![A modular, dark-toned system with light structural components and a bright turquoise indicator, representing a sophisticated Crypto Derivatives OS for institutional-grade RFQ protocols. It signifies private quotation channels for block trades, enabling high-fidelity execution and price discovery through aggregated inquiry, minimizing slippage and information leakage within dark liquidity pools.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-system-for-optimal-execution-1.jpg)

Dark pools mitigate market impact but expose institutions to adverse selection by informed traders who exploit the venue's opacity.

- 
### [How Do Systematic Internalisers Affect Price Discovery on Primary Lit Exchanges?](https://options.greeks.live/question/how-do-systematic-internalisers-affect-price-discovery-on-primary-lit-exchanges/)
![A sleek, institutional-grade system processes a dynamic stream of market microstructure data, projecting a high-fidelity execution pathway for digital asset derivatives. This represents a private quotation RFQ protocol, optimizing price discovery and capital efficiency through an intelligence layer.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-digital-asset-derivatives-execution-microstructure-prime-os.jpg)

SIs impact price discovery by internalizing order flow, reducing the volume that informs public quotes on lit exchanges.

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---

**Original URL:** https://options.greeks.live/question/what-is-the-systemic-impact-on-lit-market-spreads-when-sis-can-no-longer-offer-sub-tick-pricing/
