How to create and trade an Request For Quote (RFQ)

An RFQ can be created, copied or repeated on the 'RFQ' page. While creating a new RFQ, the interface allows you to select a pre-made options and/or futures strategy or completely customize the RFQ to your liking using the ‘Custom’ button. If the RFQ requirements are met, an RFQ can be created and traded as followed:

      1. Creating the RFQ

The "Create RFQ" window allows a wide range of combinations to be constructed. Furthermore, it showcases a wide variety of built-in strategies: Spreads, Butterflies, Straddles, Strangles, Synthetics, Risk Reversal. You can also fully customize combinations to your liking with the "Custom" button.

During customization, additional perpetual, futures or options legs can be added with the “Add Leg” function. Furthermore, you can completely make your combination delta neutral with the "Delta Hedge" button.

Instead of creating an RFQ from scratch, you can also utilize the complete combination set-up of previously traded RFQs inside the "Recent RFQs" window. This is easily performed by selecting the "Again" or "Join Trade" function, thereby reusing your or other traded RFQs respectively.

      2. Sending the RFQ

Upon completion of the combination, the "Send RFQ" function will submit the combination and Request for a Quote. The private auction will start and you will receive bid and ask quotes to sell or buy the combination respectively. The RFQ will be active for 5 minutes, allowing you to accept quotes in the "Auction" window during this time period.

The “Single Leg” button shows reference quotes for the strategy where all legs are ratio adjusted until the first leg quantity equals one.

The “Totals” button shows the quotes for the strategy based on the total requested amount.

Our "Fixed ref price" enables traders to obtain a reference quote for the combination by fixing reference prices for specific legs.

      3. Trading the RFQ

Before trading, you must provide a direction (buy or sell)and a limit price for the combination. Both direction and limit price can be adjusted within the “Auction” window. Please first select a direction and then set the limit price.

A limit price caps the taker price for executing the combination, which can be set using the “Limit” feature. To trade the RFQ, your implemented limit price must be in cross with a present quote.

After selecting both direction and limit price, the “Trade Summary” window is shown with the following information:

  • Summary of all the to-be-executed legs including direction
  • The current “Total mark price” of the strategy, based on mark quotes in the outright orderbooks
  • “Cash Value”, shows the maximum price that will be paid or received for the combination based on the selected limit price.
  • “Immediate PNL impact”, showing the immediate PNL impact of the combination based on the difference between the “Total mark price” and “Cash value”.

By clicking the “Buy” or “Sell” button in the “Trade Summary” window, the RFQ is executed. Executing the combination converts all legs directly into positions.