In this article
A request for quote, or RFQ, is a message that asks one or several liquidity providers for a price on a stated asset, a stated size and stated settlement terms; the providers answer privately, and the requester trades with the one it chooses, or with none of them. For a large crypto trade it is the usual way to obtain a price for the whole amount at once, without showing the order to the public market.
The idea is older than crypto. Bonds, swaps and foreign exchange have been traded this way for decades, and the definition written for those markets fits a crypto request word for word. The European Union's technical standards under MiFID II (Commission Delegated Regulation 2017/583) describe a request-for-quote system as one where quotes are provided in response to a request, where each quote is executable exclusively by the requester, and where the requester concludes a transaction by accepting a quote provided to it.
Dollar figures come from the illustrative worked example further down (300 BTC, reference midpoint $60,000); the third figure is the request-for-quote definition in the Commodity Futures Trading Commission's swap execution facility rules.
What does a request for quote state, and who answers it?
A request for quote states the asset, the amount, the currency the price is quoted in, the settlement terms and how long the providers have to answer; it is answered by liquidity providers, meaning firms that commit their own capital to buy from you or sell to you. Everything a provider needs to price the risk must be in the request, because a provider prices what is written, not what you meant.
A liquidity provider is a firm that quotes a price at which it will take the other side of your trade itself. In crypto that is an OTC desk dealing as principal or a market maker, a trading firm that quotes buy and sell prices continuously. A broker acting as agent is different: it does not answer the request with its own price but sends your request to providers on your behalf and brings the answers back. Both arrangements are common, and both are legitimate; what matters is that you know which one you are dealing with, because it tells you whose price you are looking at.
The request can travel by three routes. The simplest is a message on a recorded chat or a phone call to a desk you already have an account with. The second is a screen provided by a single desk, where you type a size and the desk's system returns a price. The third is a multi-dealer platform, which sends one request to several providers at the same moment and shows their answers side by side. The mechanism is identical in all three; what changes is how many providers see the request and how well the process is recorded.
You can only send a request to providers who have already opened an account for you: each one carries out its own identity and source-of-funds checks before it quotes, and sets a limit on how much it will trade with you before settlement. A request for quote is the last step of a relationship, not the first.
How does an RFQ work, step by step?
An RFQ runs through six stages: you write the request, you choose who receives it, the providers answer within a set window, you compare the answers, you accept one, and both sides confirm the trade in writing. On a liquid asset the first five can take less than a minute; the preparation before them takes far longer than the request itself.
- Write the requestState the asset, the exact amount, the quote currency, whether you want a price to buy, to sell or both, the settlement date and method, and the time by which you want an answer. Leave nothing to be assumed: a request for "about 300" invites a price for 250.
- Choose the recipientsSend the request only to providers who have onboarded you, who trade this asset in this size, and who can settle the way you need. Decide the number before you send, and send to all of them at the same moment so that each prices the same market.
- Hold the response windowProviders answer within the time you set, typically seconds on a platform and a few minutes by chat for a liquid asset. Each answer carries a price, the size it covers and how long it stays valid. A provider may also decline to quote, which is an answer in itself.
- Compare the responsesBring every answer to the same basis: the net amount you receive or pay after any separate fee, for the same size, on the same settlement date. The comparison has to be finished before the shortest validity period runs out.
- Accept one responseAccept in clear words that repeat the terms: the direction, the amount and the price. The trade exists from the moment the provider acknowledges the acceptance. Tell the others you have dealt away; they do not need to know with whom or at what price.
- Confirm in writingBoth sides exchange a confirmation stating the asset, amount, price, total consideration, fees, settlement date and settlement instructions. Check it line by line against the accepted quote on the day of the trade, while a mismatch is still easy to correct.
How is an RFQ different from an order book and from a negotiated bilateral trade?
An RFQ sits between the two other ways to trade size: an order book shows your interest to everyone and gives no certainty on the price of a large order, a negotiated bilateral trade shows it to one counterparty and takes time, and an RFQ shows it to the few providers you select and returns a price for the whole amount within seconds or minutes. The table sets the three against the same five criteria.
An order book is the list of buy and sell orders on an exchange, matched automatically at the best available price. A negotiated bilateral trade is a deal discussed with a single counterparty, where price is one of several terms on the table along with timing, settlement structure and sometimes lock-ups or instalments.
| Criterion | Order book | Request for quote | Negotiated bilateral trade |
|---|---|---|---|
| Who sees your interest | Every participant, as soon as the order rests in the book or starts consuming it | Only the providers you send the request to | One counterparty, and any broker between you |
| Price certainty | Known only for the size displayed at each price level; a large order moves through several levels | One price for the full stated size, for the validity period | Fixed only when both sides agree all terms |
| Size it suits | Up to the depth displayed near the current price | Above displayed depth, up to what one provider will take in one piece | Sizes or assets that no provider will quote on request |
| Speed | Immediate for small size; hours or days if a large order is worked in slices | Seconds to minutes | Hours to weeks |
| Information leakage | High if the order is visible, lower if it is sliced over time | Limited to the recipients, and grows with their number | Lowest in number of people, but one party learns everything |
How many providers should you ask?
For a large trade in a liquid asset, asking three to five providers is the usual balance: enough for the prices to compete, few enough that the order does not become known across the market before it trades. The number is a trade-off, not a rule, and it shifts with the size and the asset.
Each extra recipient adds one more chance of a better price. It also adds one more firm that knows a large order exists. That knowledge has value even to a firm that does not win the trade, and even where every recipient behaves properly: a provider asked to price 300 BTC adjusts its own quotes and its own inventory in case it wins. If seven firms do that at the same moment, the market can move before you have accepted anything, and the winning provider, who must then cover its position in a market that six other firms were told about, will have priced that difficulty into its quote. The more people know a large order exists, the more the market can move before it trades.
One regulated market has put a number on the competition side of the balance. In the United States, the Commodity Futures Trading Commission's rules for swap execution facilities define a request-for-quote system as one in which the request goes to no less than three market participants, who may not be affiliates of the requester or of each other. That rule covers certain swaps traded on those regulated facilities, not a spot crypto request sent to desks of your choice, where the number is normally yours to set. It is still a useful benchmark for an internal policy, and its second half deserves attention: two desks belonging to the same group are one opinion, not two.
How to move the number in practice:
- Small relative to the market, liquid asset: ask more. The information in the request is worth little and competition dominates.
- Large relative to daily activity, or a thinly traded token: ask fewer, sometimes one. The information is worth more than the last basis point of competition.
- A provider you know already holds the opposite interest: ask that one first. A natural counterparty does not need to cover its position in the market and can pay more for that reason.
- Repeat business: rotate. Asking the same five every time, and always dealing with the same one, teaches the other four to stop pricing seriously.
Should the request be disclosed or anonymous?
A disclosed request tells the providers who is asking; an anonymous request reaches them through a platform or a broker that withholds the name until a trade is agreed, or altogether. Disclosure generally earns a price fitted to you; anonymity protects the fact that you, specifically, are in the market.
Providers price the requester as well as the trade. A client whose orders tend to be followed by a sharp move in the same direction costs a provider money, and receives wider quotes over time. A client whose flow is steady, who settles on time and who deals a fair share of the requests it sends receives tighter ones. A disclosed request lets a good reputation work for you.
Anonymity is worth having when your name is itself information: a treasury known to hold a large position in one token, a fund whose strategy is public, an issuer's foundation. The request then tells the market that a large holder is acting, which may move the price more than the size alone would. The price of anonymity is that providers must quote as if the requester could be anyone, including the clients they find hardest to trade against, so the quote is usually less tight.
Why ask for a two-way price instead of a one-way price?
A two-way request asks each provider for both a price at which it would buy and a price at which it would sell, so the provider does not know which side you want; a one-way request states your direction and asks for that side only. Asking for both sides hides your direction until the moment you deal.
The provider's buying price is called the bid and its selling price the offer; the gap between the two is the spread. When a provider must quote both without knowing which one you will use, it cannot shade the price against you, and its spread is laid out in front of you as a direct measure of how keenly it is pricing. Direction is half of the information in a large order, and a two-way request keeps that half private from every provider you do not trade with. In the worked example further down, the two-way answers show spreads of $220, $170 and $360 from the three providers: the widest tells you that provider has little appetite for the trade today, in either direction.
The protection has limits. In a very large size a provider may quote wider on both sides to cover its uncertainty, and a holder known to be only a seller, such as a miner, hides nothing by asking both ways. Providers also remember: a requester that asks two-way and deals on the same side every time has disclosed its direction by habit. The four combinations compare as follows.
| Form of request | What the provider knows | What it tends to do to the price |
|---|---|---|
| Disclosed, one-way | Your name and your direction | Fitted to your record; nothing is hidden |
| Disclosed, two-way | Your name, not your direction | Fitted to your record; spread visible on both sides |
| Anonymous, one-way | Your direction, not your name | Priced for an unknown requester on a known side |
| Anonymous, two-way | Size and asset only | The least information given; often the widest spread |
What does an RFQ look like with real numbers?
In the worked example below, a fund sells 300 BTC, receives three responses, and finds that the best net result is not the highest headline price: the gap between the best and the worst response is $21,000. Every figure is illustrative and chosen for round arithmetic; none is a statement about current market prices or spreads.
The assumptions are these. The fund wants to sell 300 BTC for US dollars. It sends a disclosed, two-way request to three providers at the same moment, asking for a price on the full 300 BTC with settlement the same day, and gives them one minute to answer. At that moment the midpoint between the best bid and best offer on the main exchanges is $60,000, so the position is worth $18,000,000 at the midpoint. No exchange would actually pay the midpoint on this size; it is the yardstick, not an available price.
| Response | Bid / offer per BTC | Terms attached | Net proceeds on 300 BTC |
|---|---|---|---|
| Provider A | $59,890 / $60,110 | Full size, same-day settlement, price all-in, valid 15 seconds | $17,967,000 |
| Provider B | $59,925 / $60,095 | Full size, next-day settlement, 0.08% fee charged separately, valid 30 seconds | $17,963,118 |
| Provider C | $59,820 / $60,180 | Full size, same-day settlement, price all-in, valid 20 seconds | $17,946,000 |
Provider B shows the highest bid, $35 per BTC above Provider A, which is $10,500 more on 300 BTC before fees. But B charges 0.08% on the gross amount of $17,977,500, which is $14,382, and its net figure falls to $17,963,118, or $59,877.06 per BTC. Provider A's all-in price leaves $3,882 more. Provider C is $21,000 below A.
Measured against the midpoint value of $18,000,000, selling to A costs $33,000, or about 18.3 basis points (a basis point is one hundredth of one percent). Selling to B costs $36,882, about 20.5 basis points, and selling to C costs $54,000, exactly 30 basis points.
How do you compare responses that differ in settlement terms, size filled and validity?
Responses that differ in their terms are compared by converting each one into the same thing: the net amount for the full size, on the same settlement date, that you can actually accept in the time available. Three adjustments do most of the work: the settlement date, the size covered and the validity period.
Settlement date. Provider B in the example pays a day later than the others. A day's delay has a financing cost, and it also means a day longer during which the trade is agreed but not completed. At an illustrative interest rate of 5% a year on a 360-day basis, one day on $17,963,118 is worth about $2,495, which widens A's advantage from $3,882 to roughly $6,377. The longer exposure to the provider is harder to price and usually matters more than the interest; whether it is acceptable depends on your limits for that counterparty. How the two legs are exchanged is a subject of its own, and it is enough here to say that a quote is only comparable once you know when, and by what method, each side delivers.
Size covered. Suppose Provider C had answered differently: $59,940 per BTC, the highest price of all, but for 200 BTC only. Accepting it brings $11,988,000 and leaves 100 BTC to sell, now in a market where three providers know a seller was active. If the remainder is then sold at $59,780, it brings $5,978,000, and the total of $17,966,000 is $1,000 short of Provider A's single price for everything. The break-even is easy to compute before deciding: the remaining 100 BTC must fetch more than $59,790 each for the split to beat A. A partial response is therefore judged on the blended price including a prudent estimate for the remainder, never on its headline.
Validity. A price valid for 15 seconds that you cannot evaluate in 15 seconds is not available to you. If your approval process needs a second person to agree, say so in the request and ask for a validity period that fits; providers will widen slightly to cover the longer commitment, and that cost is real but known. The alternative, accepting after expiry and being requoted at a different level, costs more and leaves a worse record.
Check also which fees sit outside the price (a separate commission, a network fee, a bank charge on the dollar leg) and whether the price is in US dollars or in a dollar stablecoin you would then have to convert. The rule is to compare what arrives, not what is quoted.
How firm is the price you are shown?
A response to a request for quote is firm when the provider is bound to trade at that price, for that size, if you accept within the validity period; anything else is information. An indicative quote is a guide to where a price would be and binds nobody, while a firm quote is a commitment for a stated size and time. State in the request that you want firm prices, and treat an answer that does not say so as indicative.
Even a firm quote has edges that are worth asking about before the first trade, as questions of process:
- Does the provider run a final check before confirming? Some providers verify, when your acceptance arrives, that the market has not moved beyond a tolerance and that the trade fits your limit, and may decline if it does not. Ask whether this applies, what the tolerance is and how often acceptances are declined.
- What happens at expiry? Ask whether an acceptance that arrives a moment late is declined or requoted, and whether the requote can be better as well as worse.
- Which limit applies? A quote for a size above your settlement limit with that provider may be withdrawn at acceptance. Know the limit before you ask.
When is an RFQ the wrong tool?
An RFQ is the wrong tool when the size is small enough for the order book, when the order is so large or the asset so thinly traded that no provider will price it in one piece, or when price is not the main term of the deal. In each case another method serves the same goal better.
Below the depth displayed near the current price, an exchange order is simpler: if your order fits several times over inside the amount resting in the book within a few basis points of the midpoint, a request adds a step without adding value.
At the other end, a position equal to several days of an asset's normal trading cannot be absorbed by one provider at one price without a very wide quote. The usual answers are to split the trade into several requests on different days, to give one desk an order to work over time against an agreed benchmark, or to negotiate with a single natural counterparty.
Finally, some trades are not mainly about price. A sale of locked tokens, a block placed with a strategic holder or a deal with staged delivery has terms that must be negotiated and documented, and a request for quote has no field for them.
What should you keep on file after an RFQ?
After a request for quote, the file should let a third person reconstruct what you asked, what each provider answered, what the market was at that moment and why you chose the response you did. Auditors, fund administrators, investors and tax advisers ask for exactly that, sometimes years later, and which records are compulsory depends on your jurisdiction and your regulatory status.
| Record | What it shows | Where it comes from |
|---|---|---|
| The request as sent, with its time | Asset, size, direction asked, settlement terms, recipients | Chat export or platform log |
| Every response, including refusals | Price, size covered, validity, fees, time received | Chat export or platform log |
| A market reference at the time of the request | The midpoint or last price against which the result is measured | A timestamped price record from an independent source |
| The acceptance and its acknowledgement | The exact moment and terms on which the trade became binding | Chat export or platform log |
| The written confirmation | Final amounts, fees, settlement date and instructions | The provider, checked against the acceptance |
| The reason for the choice | Why the selected response was the best net result, or why a lower price was preferred | A short internal note written the same day |
| Evidence of settlement | That both legs were delivered as confirmed | Bank statement and transaction record |
The line most often missing is the reason for the choice, and it is the one that answers the hardest question. Choosing a response that is not the highest price is often right: a provider that settles the same day, or with which you have room under your limit, can be worth more than a few basis points. Written down at the time, that is a decision. Reconstructed two years later, it is an explanation.
