A request for quote (RFQ) is a trading protocol in which a participant asks one or more potential counterparties to price a specified transaction. In a dealer market, it lets a client compare prices for the amount they actually want to trade. For a quant analysing execution, the useful observation is a response to a particular inquiry: its price, size, timing and conditions matter together.
RFQ is common in electronic bond trading. It can bring competing prices to an infrequently traded bond without requiring a continuously populated order book. Streaming instead supplies prices continuously; an RFQ starts with the client's request. This distinction is explained in the BIS's 2016 account of fixed-income trading protocols; its historical market-share figures are not current trading rules.
From inquiry to trade
A typical client-to-dealer workflow runs as follows:
- Specify the transaction. Identify the bond, face amount, currency, intended settlement date and, where disclosed, buy or sell direction. Choose eligible recipients and the inquiry's timing.
- Receive replies. Dealers price the request, decline or leave it unanswered. The client checks whether the replies cover the requested size and remain available.
- Compare and decide. Accept an executable quote through the required procedure, negotiate where supported, or let the inquiry end without trading. Agreement is followed by confirmation and the applicable clearing and settlement process.
A firm quote is an offer to trade on its stated terms while valid; an indicative quote supplies a price indication requiring further confirmation. A screen price alone does not establish executability. Check the quote's size, expiry, permitted cancellation or update rules, and the client's counterparty access. Do not extend a small-size quote to a larger order. The LSE's published RFQ specification, for example, describes quantity and expiry parameters and no obligation for market makers to respond. That specification concerns its equity, ETP and depositary-receipt service, rather than a universal bond convention.
Buy at the ask; sell at the bid
In a fictional RFQ, an investor wants to buy USD 1,000,000 face of one bond. Three dealers return clean-price asks for the same full amount and settlement date:
| Dealer | Ask per 100 face | Clean consideration |
|---|---|---|
| A | 99.80 | USD 998,000 |
| B | 99.75 | USD 997,500 |
| C | 99.90 | USD 999,000 |
Dealer B's clean consideration is 1,000,000 × 99.75 / 100 = USD 997,500. It is the lowest clean amount among these replies. The illustration assumes comparable terms for ranking, but does not assert that any quote was accepted or filled. Accrued interest and fees are excluded: the settlement payment requires the bond's applicable accrued-interest treatment and charges.
Original fictional RFQ flow. Clean cash amounts exclude accrued interest and fees; price comparison alone does not establish a fill.
If the investor were selling, the relevant dealer price would be the bid, and a higher comparable bid would give greater clean proceeds. The dealer's bid–ask spread uses the dealer's perspective: the dealer bids to buy and asks to sell.
Who sees the request?
Disclosed RFQs identify the parties; competitive inquiries can put multiple dealers in competition. Anonymous RFQs conceal identities to the extent specified by the platform. All-to-all arrangements broaden potential participation beyond the traditional client-to-dealer pairing. These describe different dimensions: anonymity does not itself mean everyone can respond.
For concrete variants, MarketAxess Singapore's January 2026 rulebook, §11.2, distinguishes disclosed RFQ with bilateral relationships from anonymous, intermediated Open Trading RFQ. Tradeweb's credit RFQ description describes disclosed or anonymous inquiries and access through its AllTrade network. Recipient eligibility, identity disclosure and post-trade arrangements therefore need checking for the particular service.
Broader distribution can improve price discovery and the chance of finding liquidity, but it also reveals trading interest to more recipients. Even without a name, instrument, size and timing can convey information. Tradeweb's March 2026 discussion of dealer selection describes this competition–information-leakage tradeoff. It is especially relevant when the trade is large relative to available liquidity.
For best execution, compare feasible outcomes: all-in cost, fill probability, time, size, settlement constraints and potential market impact. Winning a clean-price comparison is one input to that judgement.
For the distinction between agreeing a trade and managing its obligations, see Exchanges and OTC Markets (public preview; full lesson requires membership).
Sources
- BIS — Hanging up the phone: electronic trading in fixed income markets and its implications (2016), trading-protocol discussion.
- London Stock Exchange — RFQ Service and Technical Description, version 1.8, effective 11 September 2023, §§3.1–3.1.10; service-specific mechanics.
- MarketAxess Singapore — Market Rulebook (January 2026), §11.2(a), (b), (f).
- Tradeweb — Request-for-Quote Trading for Corporate Bonds, product workflow and access variants.
- Tradeweb — From “Blast All” to “Select Smart” (31 March 2026), “Balancing Execution Quality and Market Impact”.