Crypto Derivatives Exchange PowerTrade Launches 'RFQs' for Institutional Options Trading

The exchange hopes to attract both institutional players and smaller traders with no minimum order sizes.

AccessTimeIconOct 5, 2022 at 5:29 p.m. UTC
Updated Oct 5, 2022 at 6:14 p.m. UTC

Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.

PowerTrade, a crypto exchange focused on derivatives, is rolling out a request-for-quote (RFQ) model for the options market, which it says will cater to institutional investors by mirroring a widely used practice in traditional finance.

The exchange, which is available as a mobile and web-based application, is the latest to launch an RFQ model. Institutional players tend to prefer to trade options as multi-leg RFQs as they allow investors to buy and sell assets in bulk. Generally speaking, an RFQ is when an investor asks brokers or market makers to bid on a trade.

Other exchanges such as Paradigm and Dfyn have launched RFQs in the past. Deribit, the world’s largest bitcoin and ether options exchange, offers a similar option called “COMBOS”.

The RFQ workflow goes as follows:

  • Client A sends an RFQ, which is then visible to all market makers, including any other client who wants to show a quote.
  • PowerTrade’s options market maker sends a two-way quote (bid/offer) back to client A.
  • Client A or any other client who is logged into the exchange can trade on the quote, and the trade settles on the platform.

Proponents say that RFQs allow users to gain access to better prices, particularly for medium- and high-volume trades.

“Our goal with RFQ is to drive the adoption of the crypto options markets by supporting smaller institutional traders with no minimum order sizes,” said Bernd Sischka, head of institutional sales at PowerTrade, in an interview with CoinDesk. “We are tackling key problems in the crypto derivatives industry that are impeding rapid adoption of these products amongst the traditional finance clients.”

PowerTrade says its investors include Pantera Capital, Ledger Prime and QCP Capital.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.

CoinDesk - Unknown

Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.