Definition
RFQ (Request for Quote) and streaming are the two fundamental approaches to receiving prices from liquidity providers. In a streaming model, LPs continuously publish bid/ask quotes that update in real-time, regardless of whether anyone intends to trade. In an RFQ model, the broker or client explicitly requests a price for a specific size and instrument, and the LP responds with a tailored quote that is valid for a brief window.
Most retail FX execution uses streaming pricing, where LPs push quotes that the aggregation engine combines into a composite feed. RFQ is more common in institutional settings, particularly for large order sizes, less-liquid pairs, or block trades where streaming quotes would not represent executable depth. Some execution environments blend both models, using streaming for standard flow and RFQ for orders above a size threshold.
Side-by-Side Comparison
| Dimension | RFQ | Streaming |
|---|---|---|
| Price initiation | Client/broker requests a quote | LP pushes quotes continuously |
| Size awareness | LP sees the intended trade size before quoting | LP quotes generic sizes; depth tiers may vary |
| Validity window | Quote valid for a brief period (seconds) | Continuously updated; stale quotes filtered |
| Information leakage | LP knows intention and size before pricing | LP does not know intention until order arrives |
| Latency profile | Higher (request-response cycle) | Lower (quotes already available) |
| Best use case | Large orders, illiquid pairs, block trades | Standard flow, major pairs, high-frequency |
RFQ Mechanics
In an RFQ workflow, the execution process is request-driven:
The key advantage of RFQ is that the LP can tailor pricing to the specific size, reducing market impact for larger orders. The disadvantage is latency (the request-response cycle) and information leakage (the LP sees the broker's intent before pricing).
Streaming Mechanics
In a streaming workflow, prices are always available:
Streaming is faster (no request-response delay) and provides less information to the LP before execution. However, for large sizes the streamed depth may not be sufficient, and the LP has no opportunity to tailor pricing to the specific order.
Benefits & Trade-offs
| Factor | Detail | |
|---|---|---|
| Execution speed | Streaming wins | No request-response cycle; quotes are pre-staged and ready |
| Large order suitability | RFQ wins | LP can provide size-specific pricing without market impact |
| Information leakage | Streaming wins | LP does not know your intent until the order arrives |
| Price tailoring | RFQ wins | LP customizes price to the specific size and direction |
| Stale quote risk | Both models face staleness: streaming from delayed feeds, RFQ from validity windows | |
| Operational complexity | RFQ higher | RFQ requires additional protocol handling, timeout management, and response routing |
Common Marketing Claims vs Reality
| Claim | Reality |
|---|---|
| "Real-time streaming prices" | All streaming has inherent latency. "Real-time" means frequently updated, not zero-delay. Stale quote filters determine how fresh prices actually are. |
| "Executable pricing at all times" | Streaming prices are indicative until an order is submitted. LPs may reject via last look, especially during volatile conditions. |
| "Institutional RFQ access" | True RFQ requires the LP to price against the specific size. Some "RFQ" implementations are simply delayed streaming with a confirmation step. |
What to look for in an Execution Policy
- Does the execution policy specify whether pricing is streamed, RFQ-based, or hybrid?
- Is the stale quote filter threshold documented for streaming feeds?
- For RFQ: is the quote validity window disclosed?
- Does the policy describe the size threshold at which RFQ is used instead of streaming?
- Is the information shared with LPs during RFQ documented (size, direction, both)?
- Are fill rates and rejection rates published separately for RFQ and streaming execution?
Educational content only. This is not financial advice. Always consult qualified professionals before making trading decisions.