Builder Logic

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What does that mean?

Essentially, the Buyer’s Perspective acts as a spread builder. The easiest way to think about this:

Below, we have more detailed examples on how the RFQ Builder works.

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Buyer's Perspective

Predefined Example (Call Spread)

Taker Build

We know this structure is the more the ITM call vs. the less ITM call. So in the Paradigm RFQ Builder, the Call Spread would be:

That is why our predefined structures automatically build it from this perspective.

Maker Response

Taker Execution on the Response

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Seller's Perspective

You may see negative spread pricing if the RFQ is built from the Seller’s Perspective. Inverted pricing can cause confusion for both makers and takers, which is why quoting from the Buyer’s Perspective is recommended.

Custom/Negative Pricing Example (Outright built from the Seller’s Perspective)

Taker Build

Taker accidentally changes the “Action” on an outright to “Sell,” maybe incorrectly thinking this is an order ticket.

This will ask the maker: “What is your market on this short outright structure?” The premium will be priced negatively.

Maker Response

Since the outright was built from a Seller’s Perspective (i.e. Action = Sell), the negative (-) multiplier is applied to leg prices to reflect the short structure.

Taker Execution on the Response

Since the outright was built from a Seller’s Perspective (i.e. Action = Sell), the negative (-) multiplier was applied to leg prices when the Maker priced the RFQ. So you may see negative pricing responses to reflect the short structure.

If you have any questions, please feel free to reach out to our Sales team. Their Telegram contact information is below, or email us at support@paradigm.co. We’re happy to assist and walk you through examples that might be helpful.

Contact Us

Michal Koonin

Clement Cheng

WeChat: clecheng

Laura Vidiella

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