Request For Market (RFM)

In the context of forex trading, Request for Market (RFM) is a type of order execution method used by brokers to provide liquidity to traders. It is commonly used in electronic trading platforms and is also known as Request for Quote (RFQ) or Request for Stream (RFS).

When a trader places an RFM order, it is sent to the broker who acts as a market maker. The broker then provides a quote for the requested currency pair, including the bid and ask prices. The trader can choose to accept the quote or reject it. If the quote is accepted, the trade is executed at the quoted price.

RFM orders are typically used by institutional traders, such as banks, hedge funds, or large corporations, who require larger trade sizes or have specific execution requirements. It allows them to request a customized quote for their trade, rather than relying on the standard bid-ask spread provided by the broker.

The RFM order execution process involves the following steps:

1. Trader places an RFM order: The trader sends a request to the broker specifying the currency pair, trade size, and any additional execution instructions.

2. Broker provides a quote: The broker receives the RFM order and provides a quote that includes the bid and ask prices for the requested currency pair. The quote is typically valid for a short period of time, allowing the trader to make a decision.

3. Trader accepts or rejects the quote: The trader evaluates the quote and decides whether to accept or reject it. If accepted, the trade is executed at the quoted price. If rejected, the trader can either request a new quote or search for alternative liquidity providers.

RFM orders offer several advantages to traders, including:

1. Customized pricing: RFM orders allow traders to request specific pricing based on their trade size and execution requirements. This can be beneficial for large trades or when there is a need for immediate execution.

2. Increased transparency: Traders can see the bid and ask prices provided by the broker, allowing them to assess the fairness of the quote and make an informed decision.

3. Flexibility: RFM orders offer flexibility in terms of trade size and execution instructions, allowing traders to tailor their orders to their specific needs.

It’s important to note that RFM orders may not be available to all traders or offered by all brokers. They are typically more common in institutional trading and may require higher minimum trade sizes.