The international foreign exchange market is an attractive investment segment. After all, even the minimum start-up capital can bring good profits (of course, with the correct assessment of risks and an effective strategy). It’s no surprise that many users and brokers are thinking about starting a forex business. But, before creating your own company, you need to get as much theoretical information as possible.
And one of the most important factors for Forex market participants is asset liquidity. This indicator shows the possibility that an asset can be bought or sold quickly at market price. Moreover, this aspect affects the financial markets. Forex prime brokers strive to provide maximum liquidity to their assets. Therefore, they partner with reliable liquidity aggregators providing access to large pools of liquidity. These resellers are responsible for the speed of order fulfillment and increasing the depth of the order book. Let’s take a look at the LP features.
Main Task of Liquidity Provider
When you work with Forex, you need to provide clients with the best tools. This should include a wide list of currency pairs, excellent conditions for buying and selling, as well as a high speed of order execution. It depends not only on a functional and user-friendly site with a nice design. But also, on which liquidity provider the broker cooperates with.
The main task of LP is mediation. The liquidity provider provides a fast and high-quality relationship between the broker (after all, this is where the trader makes a deal) and market makers with a large pool of liquidity (Barclays, SAXO Bank, JP Morgan, Goldman Sachs, AIG, etc.). Thanks to this approach, the depth of the order book increases many times over. And this allows you to execute a user’s order in a few milliseconds (even for unpopular pairs).
It should be said that the Forex market today works not only with standard currency pairs. The platform also work with CFDs, ETFs, metals, and commodities. In this case, LP’s work remains the same: mediation with market makers. This approach also allows the trader to act quickly and efficiently.
Why Good Liquidity is So Important?
Every broker who decides to start a business on Forex should try to cooperate only with the best liquidity providers. Because in this way the company is able to provide maximum liquidity for assets. And this has several important benefits.
• No price slippage. Due to high liquidity, a trader is able to execute an order almost instantly (in a few milliseconds). Otherwise, he is forced to wait, which leads to price slippage and additional losses.
• Zero spread. Due to the high liquidity, the difference in the price of buying and selling an asset is almost zero. This is an added plus for traders and potential clients.
Therefore, it is important to achieve high liquidity in the process of creating a cryptocurrency exchange. Because this will make your platform as attractive as possible to customers. Otherwise, they will be unhappy with the high spread and price slippage, which will push them to go to another exchange.
Important Features of Quality LP
Today, a large number of LPs promise to help you start a brokerage business by providing assistance. Unfortunately, not all companies work well and are trustworthy. Therefore, it is important to pay attention to the key characteristics of the liquidity provider.
• Number of tools. Having a wide range of currency pairs is an excellent indicator. It is also good if the LP accepts bitcoin payments, CFDs, ETFs, accepts other crypto payments, etc.
• The order execution time should be minimal. High-quality LPs are capable of providing a delay of 10 milliseconds.
• Professional support service. The courteous and professional staff should be ready to help you 24/7.
• Minimum spread. LP must offer the bestpayment solution. The difference between the sale and purchase price of an asset can be as low as $0.01. For the Forex market, a zero spread is preferable.
We’ve ranked the best liquidity providers to help you create exchangeof your dream.
B2Broker – Advanced Solutions for Your Business
B2Broker will help you create the best white label cryptocurrency exchange. The liquidity provider has access to liquidity pools in a wide variety of markets. These can be standard currency pairs, cryptocurrencies, stocks, etc. The order execution time will be minimal here (from 12 milliseconds). Also, the service works with margin and CFD instruments and provides zero spread for clients.
B2Broker works with large market makers with access to a large pool of liquidity. This allows you to quickly execute any deal. And the availability of high-quality software allows us to make an ideal platform that meets the personal requirements of customers. Moreover, B2Broker constantly introduces new solutions and uses innovative technologies. An excellent choice for creating an exchange with an excellent reputation and functionality.
FXCM Pro: Optimal Pricing and Reliable Support
FXCM Pro offers brokers solutions for creating a trading platform. The service provides a high level of asset liquidity through cooperation with major world banks and investment funds. This is a real LP tier1, which guarantees high-quality and fast order execution, and also has a good reputation among users.
Also, the company has professional managers and is an effective provider of liquidity. Cooperation with holders of large liquidity pools allows us to satisfy any user orders: be it small transactions of private traders or orders of large players. Not only currency pairs are available, but also stocks, CFDs, ETFs, metals, etc.
Leverate – Low Spreads and Great Price Match
Leverate‘s LXCapital is a renowned liquidity provider that can help you start an exchange with maximum efficiency. It offers brokers excellent conditions and a large pool of services. The service acts as a liquidity provider for currencies, cryptocurrencies, stocks, CFDs. The site has a simple and straightforward interface, which significantly lowers the entry threshold. The client can control all processes thanks to several convenient tools.
Moreover, the company has access to a large pool of liquidity. This allows you to significantly increase the depth of the order book. This approach reduces the execution time of an order; it is carried out almost instantly. Thanks to Leverate’s LXCapital, the trader gets all the benefits, including stability, security, and speed.
X Open Hub – Quality Player and Excellent Functionality
It is a renowned company that can make the process of starting a Forex business fast and efficient. LP provides liquidity for three thousand different instruments. Popular and unpopular currencies, digital assets, stocks, commodities, index,Forex, and other assets are available.
Also, the service offers the minimum spread to its clients (from $0.00001) and fast lead time (according to statistics, the average delay is 33 milliseconds). The commission for services is small, which is also an additional plus for brokers.
Advanced Markets – A Liquidity Provider Guaranteeing Reliability, Convenience, And Transparency
Another player who will help you effectively start a business in Forex. The company offers competitive spreads, but the main advantage of the service is a reliable exchange software and a high level of security. The firm fulfills customer orders with minimal latency (about 30 milliseconds) and is also a quality intermediary between large banks and non-bank ECN liquidity providers.
One of the added benefits of Advanced Markets is the DMA Hub marketplace. Thanks to this, the company allows clients to choose their own liquidity for assets. This option allows you to create a unique trading environment, even specifying the frequency of updating quotes.
Now you know how to create an exchange with maximum efficiency. It is necessary to cooperate with quality and reliable liquidity providers. In this case, the order book will have great depth and advise customers’ requirements. We have presented to your attention five companies that deserve attention and offer the best solutions and innovative exchange software. Strive for success with the most reliable and quality partners.