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The Bybit exchange offers one of the biggest and most versatile order book trading systems in the crypto industry. However, for high-volume trades in spot, options and futures, traditional order book transactions come with limitations, such as price volatility, high slippage, low efficiency, information exposure and limited flexibility.
To address the needs of large traders, particularly institutional investors, Bybit has introduced a solution for substantial orders: RFQ (Request for Quotation). RFQ is applicable to spot, option, as well as to futures orders (which are widely used by spread traders). It lets traders securely and privately request the best offers for bulk trades, and review proposals from multiple liquidity providers. Using the RFQ function, you can further optimize your trading strategy and make it faster, more efficient and potentially more profitable.
Key Takeaways:
Bybit RFQ (Request for Quotation) is a feature within your Bybit trading account that allows you to request custom offers for large orders of spot, options and futures trades that form part of your trading strategy.
Using RFQ, you can get offers from multiple, high-grade institutional liquidity providers off the main order book, thus benefiting from lower slippage, enhanced privacy, efficient execution, reduced complexity and prebuilt combo templates.
Spread trading is a valuable strategy in crypto. It helps cushion you from wide market swings, typical in a crypto market, as it focuses on price gaps between two assets rather than the overall market trend. And spot, options and futures are among the most common instruments used in this strategy. However, large trading orders can be inefficient when executed through a general order book system.
With this in mind, Bybit has introduced RFQ, a solution that enables traders to request quotes for large planned orders. By submitting a request through RFQ, you can get multiple quotes from leading liquidity providers, including top-tier institutional players. The quotes are tailored to the request, allowing you to evaluate and select the optimal offer.
RFQ offers clear advantages for substantial trading orders, whether for individual legs of a smaller strategy or more complex combinations. The key benefits include instant execution, transparent quotes, reduced slippage, enhanced flexibility and potential fee savings, with discounts of up to 50% on fees for options and futures combo.
The RFQ function is accessible directly from your main trading interface on the Bybit web platform. From the Trade menu at the top, navigate to RFQ, then choose either the Options Combo or the Futures Spread.
The example is as below, which is populated by leg details, such as buy or sell and quantities. Click on the yellow Create RFQ button to submit your combo details and receive multiple quotes from select liquidity providers (Makers).
Offers received through RFQ are prioritized by best quotes to make your evaluation as efficient as possible.
Each provider submits both Buy and Sell prices to ensure fairness. The sell price denotes the direction opposite from your combo legs, while the buy price matches your combo legs’ direction. You can then compare the offers presented and select a preferred one. After your order’s execution, the RFQ position will be merged into your Unified Trading Account (UTA).
Instead of creating a combo from scratch, you can use the RFQ Builder tool integrated into the trading interfaces for options and futures. The Builder provides templates with pre-created settings in order to quickly set up combos, making it a great tool for quick and efficient setup of complex strategies. Choosing template also offers you up to 50% fee savings.
These templates come with adjustable legs, allowing you to fine-tune the combo details for your specific goals. The default setting for options is Call, but you have the option to switch to Put. Some legs, however, have preset directions that can’t be modified, since the templates are set up from a buyer’s point of view.
When you send an RFQ, you can choose your preferred makers. You also have the option of remaining anonymous, in which case neither you nor the quoting party will be able to see each other’s identities. Only the prices offered can be seen.
If you prefer maximum flexibility in setting up your trading legs and combos, you can construct custom combos. Custom combos can be created either from scratch or by adjusting the existing templates. You can add legs with the Add Positions setting, or use Delta Hedge for hedging.
With custom mode, you can even import your existing positions (if they’re based on the same underlying asset, and don’t duplicate any legs in the current combo).
While custom combos provide maximum flexibility, please note that they don’t qualify for the 50% fee discounts that apply to template combos.
Bybit’s RFQ provides a number of advantages to combos traders placing substantial orders.
First, there’s trading privacy, with order sizes kept off the publicly viewable order book. You can also further boost your privacy by choosing to remain anonymous when you send your RFQ orders to the makers.
Secondly, slippage is reduced because custom offers from providers don’t affect the public order book, thereby preventing bulk trades from pushing prices up or down.
RFQ also streamlines multi-leg combos via an instant one-click execution that’s directly tied to your UTA. The streamlined execution of complex strategies helps save time, reduce errors and optimize capital utilization.
RFQ also offers minimal combos and lower fees, helping you to secure fair prices when you enter or exit a trade. This reduces hidden costs, and is particularly beneficial when executing complex combos. If you use template combos, you can also take advantage of the 50% reduction in fees.
Finally, you’ll experience full transparency for orders, thanks to multiple competing offers from high-grade institutional providers delivered for fair comparison.
Trading with large orders can easily grow complex and become affected by slippage if using the standard order book at an exchange. Bybit’s RFQ offers a tailored product that significantly reduces the uncertainty and complexity of such trades.
By taking combos orders off the main book and delivering custom offers, RFQ reduces fees, improves the transparency of the process, helps traders maintain privacy and provides unmatched flexibility. Additionally, the templates available through the RFQ Builder reduce complexity and save time, letting you concentrate on executing your combos strategy. If you’re into heavy-order combos trading in crypto, Bybit’s RFQ is an essential product to explore.
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