In this article https://www.risk.net/awards/7741391/flow-market-maker-of-the-year-citadel-securities describing Citadel Securities the market maker, it says

The firm’s electronically executed US Treasuries volume increased by 90%, and voice trades rose by 44% as it gained market share during the period. On dealer-to-client trading platform Tradeweb, the business had a risk-hit ratio of 34% during March, measuring the number of quotes to execution.

  1. What does a "risk-hit ratio" of 34% mean?

  2. What does "number of quotes to execution" mean? Is this number the higher the better?

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    $\begingroup$ Probably it means 34% of quotes (proposing a price to a client via the Tradeweb system) result in an execution (the client agrees to buy/sell at that price). $\endgroup$ – noob2 Apr 10 at 23:24
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    $\begingroup$ They should have said "number of quotes to executions" (with an "s") . But it is really the inverse: the ratio of the number of executions to the number of quotes. $\endgroup$ – noob2 Apr 12 at 22:52
  • $\begingroup$ Thanks @noob2 ! I think that makes sense. Now, for each "quote", can there be 0/1/many executions? I guess by "quote", I'm confused if it's just a price (buy at \$100), or is there also a time/quantity dimension to it (e.g. buy at \$100, 50 shares, for next 5 minutes and cancel quote if not filled). Maybe there's just not enough context here, which is okay! $\endgroup$ – sam Apr 16 at 14:42
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    $\begingroup$ Yes, the customer says "I want to buy 100 Million 10 year bonds" what price can you give me? The trader gives a price and the customer has to answer quickly "OK", or "no thanks I'll call you later". So it is for a specific quantity of a specific bond at a specific time, it either gets done or not. It is not "see what you can do, what average price you can get over the next few minutes" it is a firm quote for a specific (generally large) quantity. Once the customer says OK, the firm has to deliver. $\endgroup$ – noob2 Apr 16 at 15:35
  • $\begingroup$ Makes sense. Thanks again. Feel free to post above as an answer as I think that answered my question fully. $\endgroup$ – sam Apr 16 at 16:44

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