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Portfolio trading vs RFQ: Understanding transaction costs in US investment-grade bonds

Portfolio trading vs RFQ OFC

On the one hand, portfolio trading offers many advantages, such as facilitating risk transfer, enabling the trading of illiquid securities and guaranteeing certainty of execution. On the other, request-for-quote (RFQ) list trading proves beneficial for handling larger orders by reducing cost premiums.

In this whitepaper, the MarketAxess research team explores how factors such as order size, liquidity profiles and associated costs determine whether a portfolio trade or an RFQ list trade is the optimal choice. In this comparative analysis, the team also delves into the ongoing debate over whether exchange-traded funds and their associated risk profiles are the most significant factors influencing execution quality for portfolio trades.

Download the MarketAxess Portfolio trading vs RFQ whitepaper

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