Directed RFQ (DRFQ), available through CME Direct, allows for faster and more accurate block trade workflows. Users can source liquidity, negotiate, and book block trades in one place, without the use of phone or instant message.

Directed RFQ example

A market participant, the requestor, wants a quote on a future, option, or strategy. Using the Directed RFQ window, a requestor selects specific recipients from their network who can provide a quote. The recipients are notified of the request and they can choose to respond and provide a market.

A response can be a bid, an offer, or a two-sided market and is referred to as the indications of interest. Recipients can also decline to give a response. Responding indications of interest appear in a specialized, aggregated window. The requestor can then select from the responses and begin to negotiate with those providers individually.

For example, after receiving four responses, the market participants begin to negotiate on those prices ‒ continuing negotiation until one party acts on a displayed price level. If the initiator wants to sell at $1, they would click to hit the bid ‒ then click sell to confirm.

Following an action on the quoted market, the indicator is notified and must confirm the details. After selecting account details, a deal ticket is automatically populated for submission upon confirmation.

The basics

Pre-populated details include:  

  • Deal ticket information
  • Counterparty selection
  • Deal execution time

The block trade is then submitted to CME’s ClearPort.

Directed RFQ on CME Direct provides:

  • Streamlined electronic negotiation in a single platform
  • Side-by-side access to both Globex and ClearPort venues
  • Detailed and exportable audit trails for record keeping

Directed RFQ consolidates phone and chat in one place – eliminating lengthy correspondence and creating a method for faster and more efficient block trades. Access and trade CME Group futures, options, and block markets all on one screen with CME Direct.

Test your knowledge

ACCREDITED COURSE

In case you didn’t know, the CFA Institute allows its members to self-determine and report continuing education credits earned from external sources. CFA Institute members are encouraged to self-document such credits in their online CE tracker. CME Institute offers a variety of courses, webinars, and white papers to support your professional education.

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