If you’re looking for a Forex Liquidity Provider you’ve probably figured it out that in what concerns the forex market, not all top liquidity providers are the same.
In fact, depending on your needs, there are different types you can choose from.
What to know more about them? Then read on!
In what concerns the foreign exchange market, a liquidity provider is a considered to be a large company which provides markets with the access to be traded via offering to both buy or sell currency pairs at given set prices.
Examples of these types of companies are financial institutions, investment banks, funds, corporations which work on a multinational level, firms, etc.
Accordingly, liquidity providers are known for operating large amounts of money and assets like commodities, stocks, and so forth.
How Many Liquidity Providers Are There?
There are many types of liquidity providers are out there in the forex market.
Usually, market liquidity providers are defined by the technology they use and/or the assets they operate with and are involved with.
As such, the six most common types of liquidity providers are:
1. Top Tier Liquidity Providers
2. Institutional Crypto Liquidity Providers
3. Non-Bank Liquidity Providers FX
4. ECN Liquidity Providers
5. CFD Liquidity Providers
6. STP Liquidity Providers
Who is the Biggest Liquidity Provider?
It is difficult to pinpoint who is the top liquidity provider generator or the one with the deepest liquidity pools as the responsibility is shared between several entities and, as well all know, in terms of LPs the more, the merrier.
The reason behind this is that more LPs contribute to greater price stability which in turn creates a more harmonious trading environment given the lower risk it entails (as opposed to what happens when there’s a lack of liquidity).
So, who are the top LP players?
· Commercial banks: between their own proprietary accounts and their clients, commercial banks trade billions in foreign exchange on a daily basis
· Central banks: who control the currency’s supply and stabilize the markets whenever necessary
· Retail Forex Brokers and Investment Firms
How Do I Choose a Good Liquidity Provider?
Each of these 6 comes with inherent strengths and weaknesses so when the time comes to select one, you should make sure how their financial services will fit with your business needs.
In essence, there are at least 9 things you’ll want to check under their hood.
A proven track record: the reasons behind this should be self-explanatory. It is quintessential that your business operates with trusted partners in every sector so there’s no reason why it should be different here.
Stability: When applying the Lindy effect to the financial industry, it tells us that the longer something a business has been operating, the longer its remaining life expectancy is. Companies who are reliable tend to stand the test of time, so look for those.
Their offering: For some, flexibility might be key while for others multi-asset liquidity is the priority. Having a wide range of instruments which are often updated and expanded is also a good sign as well as access to the markets you need such as cryptocurrency liquidity.
Their customer support: Don’t expect to be met with a perfect solution which never, ever shies away from being flawless. Having support is mandatory when dealing with your preferred LP, so make sure that they have support channels which are convenient to you (phone, live chat, email, and so forth).
Regulation: A trustworthy liquidity provider will be regulated, period. Being regulated attests a LP’s transparency and overall security. It also means that they’ll be closely following the industry’s best practices and information about their performance will be easily accessible.
Their execution: top liquidity providers are fast as demand is relentless for priority execution while keeping the fewest possible rejects, requotes, and little to no slippage. Testing here is mandatory because all of these factors can vary given the market’s volatility, so make sure you’re on top of them.
Their pricing: regardless of their size, it is mandatory for prime brokerages to secure the top cost-effective offers from a liquidity provider as it is one (if not the most) important aspect of their strategy.
By doing so, their profits are maximized, and they are much more competitive. However, the cheapest offers may be a trap given that providers have different costs and there is a certain minimum to which the price won’t fall under. Accordingly, you should request quotes for different liquidity providers as to assess their commissions, spreads, fees, and other possible charges.
Their software: LPs that feature their own exchange tech and trading platforms as a way to connecting to their providers is something you should look for because it allows for higher performance, speed, and straight to the point tech support.
Their data and their price feeds: reliability and speed are key. As such, remember to ask for the location of their data centers and servers, and look to see if they are close to a financial capital. Remember that delays correlate with facing unnecessary risks.
If you’ve taken into consideration all the points above, you’ll find that the best liquidity provider will simply be the one which better suits your needs.
With that in mind, here are our 5 picks for the top liquidity provider:
B2Broker
Founded in 2014, B2Broker originally started out as a tech solution company for the forex industry. However, they quickly pivoted into becoming a liquidity provider aiming at market operators in Asia and the Middle East.
As such, B2Broker now operates in two different fields: liquidity provision and forex market trading technologies.
B2Broker has a proprietary platform (OCX – open currency exchange) which aggregates numerous forex market participants into one liquidity network.
They also provide liquidity for cryptocurrencies.
As B2Broker sets their sights on guaranteeing the absolute best price quotes and spreads, their features include the ability to place orders at any given level of the order book, access 20 levels of market depth, different liquidity linkup channels, and 9 assets classes ranging from ETFs, to crypto, energy & metals, CFDs, and currencies.
Leverate
Leverate is one of the best tech and services provider for the brokerage industry.
Founded in 2008, they have since expanded to a global powerhouse which operates as a premium solutions and services provider for prime brokers and financial institutions.
Through LXCapital, Leverate’s liquidity service, Leverate is able to offer liquidity for any type of brokerage by aggregating liquidity from the best financial institutions. In turn they’re able to provide incredibly competitive rates on Forex, Stocks, Crypto, and CFDs, all while ensuring very low latency.
FXCM Pro
FXCM Group is a subsidiary of the Jefferies Financial Group, meaning it is able to provide FXCM Pro (its institutional brokerage and trading solutions arm), with the full breadth and scale of the Jefferies group.
With over 20 years of experience, FXCM’s expertise is paramount to seeing the needs of its clients met.
It partners up with top-tier banks, prime brokers, and non-bank liquidity providers, meaning its liquidity management team has all the tools to meet every order.
Advanced Markets
Advanced Markets is a synonym with transparency and reliability. In terms of deep liquidity, its winning formula is simple: offering tight spreads in tandem with reliable execution.
Advanced Markets also partners up with the world’s largest, top tier financial institutions who, alongside multibank ECNs, are integrated within AM’s operating infrastructure, meaning they’re able to provide their clients with live, executable, liquidity (multi-provider), and a virtual clearing network.
It also features one of the deepest liquidity pools in what concerns Spot FX, Energies, and precious metals.
Swissquote
Swissquote was founded in 1996 and has business relations and partnerships with top financial institutions and Tier 1 banks.
By doing so, it is able to keep both its operational costs and its trading costs down while boosting their trading volumes and revenue.
Swissquote offers tier-1 liquidity solutions, competitive prices, and tailor-made, innovative services which empowers their clients in terms of features and best price access on over 130 financial instruments.
If you’re looking at only the top liquidity provider in the US, we’ve also got you covered:
What Are the Top Forex Liquidity Providers in the USA?
From banks to hedge funds and investment firms, there are plenty Forex LPs to choose from. However, to find the best forex LP in the USA, the list narrows down to these four names:
· J.P. Morgan
· The New York Stock Exchange (NYSE): biggest options LP in the US
· DRW
· Advanced Markets
Wrapping up
When looking for a liquidity provider, there are some elements you should never discard. Accordingly, you should be asking yourself these questions:
· Does this liquidity provider have a proven track record?
· Is this liquidity provider regulated in top tier jurisdictions?
· How fast and reliable is this provider’s execution?
· Does this LP have solid partnerships with tier1 institutions?
· What instruments do they have?
By answering these you might see your best match begin to take shape. As such, the top liquidity provider, as it happens with many other things, will solely depend on your needs and how it can meet them.
If you’re looking for a Forex Liquidity Provider you’ve probably figured it out that in what concerns the forex market, not all top liquidity providers are the same.
In fact, depending on your needs, there are different types you can choose from.
What to know more about them? Then read on!
In what concerns the foreign exchange market, a liquidity provider is a considered to be a large company which provides markets with the access to be traded via offering to both buy or sell currency pairs at given set prices.
Examples of these types of companies are financial institutions, investment banks, funds, corporations which work on a multinational level, firms, etc.
Accordingly, liquidity providers are known for operating large amounts of money and assets like commodities, stocks, and so forth.
How Many Liquidity Providers Are There?
There are many types of liquidity providers are out there in the forex market.
Usually, market liquidity providers are defined by the technology they use and/or the assets they operate with and are involved with.
As such, the six most common types of liquidity providers are:
1. Top Tier Liquidity Providers
2. Institutional Crypto Liquidity Providers
3. Non-Bank Liquidity Providers FX
4. ECN Liquidity Providers
5. CFD Liquidity Providers
6. STP Liquidity Providers
Who is the Biggest Liquidity Provider?
It is difficult to pinpoint who is the top liquidity provider generator or the one with the deepest liquidity pools as the responsibility is shared between several entities and, as well all know, in terms of LPs the more, the merrier.
The reason behind this is that more LPs contribute to greater price stability which in turn creates a more harmonious trading environment given the lower risk it entails (as opposed to what happens when there’s a lack of liquidity).
So, who are the top LP players?
· Commercial banks: between their own proprietary accounts and their clients, commercial banks trade billions in foreign exchange on a daily basis
· Central banks: who control the currency’s supply and stabilize the markets whenever necessary
· Retail Forex Brokers and Investment Firms
How Do I Choose a Good Liquidity Provider?
Each of these 6 comes with inherent strengths and weaknesses so when the time comes to select one, you should make sure how their financial services will fit with your business needs.
In essence, there are at least 9 things you’ll want to check under their hood.
A proven track record: the reasons behind this should be self-explanatory. It is quintessential that your business operates with trusted partners in every sector so there’s no reason why it should be different here.
Stability: When applying the Lindy effect to the financial industry, it tells us that the longer something a business has been operating, the longer its remaining life expectancy is. Companies who are reliable tend to stand the test of time, so look for those.
Their offering: For some, flexibility might be key while for others multi-asset liquidity is the priority. Having a wide range of instruments which are often updated and expanded is also a good sign as well as access to the markets you need such as cryptocurrency liquidity.
Their customer support: Don’t expect to be met with a perfect solution which never, ever shies away from being flawless. Having support is mandatory when dealing with your preferred LP, so make sure that they have support channels which are convenient to you (phone, live chat, email, and so forth).
Regulation: A trustworthy liquidity provider will be regulated, period. Being regulated attests a LP’s transparency and overall security. It also means that they’ll be closely following the industry’s best practices and information about their performance will be easily accessible.
Their execution: top liquidity providers are fast as demand is relentless for priority execution while keeping the fewest possible rejects, requotes, and little to no slippage. Testing here is mandatory because all of these factors can vary given the market’s volatility, so make sure you’re on top of them.
Their pricing: regardless of their size, it is mandatory for prime brokerages to secure the top cost-effective offers from a liquidity provider as it is one (if not the most) important aspect of their strategy.
By doing so, their profits are maximized, and they are much more competitive. However, the cheapest offers may be a trap given that providers have different costs and there is a certain minimum to which the price won’t fall under. Accordingly, you should request quotes for different liquidity providers as to assess their commissions, spreads, fees, and other possible charges.
Their software: LPs that feature their own exchange tech and trading platforms as a way to connecting to their providers is something you should look for because it allows for higher performance, speed, and straight to the point tech support.
Their data and their price feeds: reliability and speed are key. As such, remember to ask for the location of their data centers and servers, and look to see if they are close to a financial capital. Remember that delays correlate with facing unnecessary risks.
If you’ve taken into consideration all the points above, you’ll find that the best liquidity provider will simply be the one which better suits your needs.
With that in mind, here are our 5 picks for the top liquidity provider:
B2Broker
Founded in 2014, B2Broker originally started out as a tech solution company for the forex industry. However, they quickly pivoted into becoming a liquidity provider aiming at market operators in Asia and the Middle East.
As such, B2Broker now operates in two different fields: liquidity provision and forex market trading technologies.
B2Broker has a proprietary platform (OCX – open currency exchange) which aggregates numerous forex market participants into one liquidity network.
They also provide liquidity for cryptocurrencies.
As B2Broker sets their sights on guaranteeing the absolute best price quotes and spreads, their features include the ability to place orders at any given level of the order book, access 20 levels of market depth, different liquidity linkup channels, and 9 assets classes ranging from ETFs, to crypto, energy & metals, CFDs, and currencies.
Leverate
Leverate is one of the best tech and services provider for the brokerage industry.
Founded in 2008, they have since expanded to a global powerhouse which operates as a premium solutions and services provider for prime brokers and financial institutions.
Through LXCapital, Leverate’s liquidity service, Leverate is able to offer liquidity for any type of brokerage by aggregating liquidity from the best financial institutions. In turn they’re able to provide incredibly competitive rates on Forex, Stocks, Crypto, and CFDs, all while ensuring very low latency.
FXCM Pro
FXCM Group is a subsidiary of the Jefferies Financial Group, meaning it is able to provide FXCM Pro (its institutional brokerage and trading solutions arm), with the full breadth and scale of the Jefferies group.
With over 20 years of experience, FXCM’s expertise is paramount to seeing the needs of its clients met.
It partners up with top-tier banks, prime brokers, and non-bank liquidity providers, meaning its liquidity management team has all the tools to meet every order.
Advanced Markets
Advanced Markets is a synonym with transparency and reliability. In terms of deep liquidity, its winning formula is simple: offering tight spreads in tandem with reliable execution.
Advanced Markets also partners up with the world’s largest, top tier financial institutions who, alongside multibank ECNs, are integrated within AM’s operating infrastructure, meaning they’re able to provide their clients with live, executable, liquidity (multi-provider), and a virtual clearing network.
It also features one of the deepest liquidity pools in what concerns Spot FX, Energies, and precious metals.
Swissquote
Swissquote was founded in 1996 and has business relations and partnerships with top financial institutions and Tier 1 banks.
By doing so, it is able to keep both its operational costs and its trading costs down while boosting their trading volumes and revenue.
Swissquote offers tier-1 liquidity solutions, competitive prices, and tailor-made, innovative services which empowers their clients in terms of features and best price access on over 130 financial instruments.
If you’re looking at only the top liquidity provider in the US, we’ve also got you covered:
What Are the Top Forex Liquidity Providers in the USA?
From banks to hedge funds and investment firms, there are plenty Forex LPs to choose from. However, to find the best forex LP in the USA, the list narrows down to these four names:
· J.P. Morgan
· The New York Stock Exchange (NYSE): biggest options LP in the US
· DRW
· Advanced Markets
Wrapping up
When looking for a liquidity provider, there are some elements you should never discard. Accordingly, you should be asking yourself these questions:
· Does this liquidity provider have a proven track record?
· Is this liquidity provider regulated in top tier jurisdictions?
· How fast and reliable is this provider’s execution?
· Does this LP have solid partnerships with tier1 institutions?
· What instruments do they have?
By answering these you might see your best match begin to take shape. As such, the top liquidity provider, as it happens with many other things, will solely depend on your needs and how it can meet them.
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