Liquidity Providers


Get the deepest liquidity pool for your FX & Crypto broker

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TradeToolsFX creates technological solution for the Forex market. The solutions can be used by the Forex-related companies and representatives including brokerage firms and financial institutions. At first, the company was solely Forex oriented, however, in the recent years, a binary options direction was added.

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Offices

  • icon United States

Apexum is an expert in integrating brokerage solutions that include a full set of services aimed at successful brokerage creation.

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  • icon Russia
  • icon Hong Kong
  • icon United States

Sucden Financial offers its advanced derivatives broker solutions, trading solutions and liquidity sourcing services across various markets. The company gives access to a variety of assets and trading platforms.

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  • icon Poland

FXE Prime is a truly innovative company that has offices in places like Silicon Valley, Poland, and Chicago and is actively engaged in the development of financial technologies. Since its launch in 2015, FX-EDGE has been developing its own trading technology based on the “no last look execution” principle. FX-EDGE is currently one of the trading venues for ECN.

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Jivestor is an experienced White Label service provider. Jivestor can additionally assist companies in the process of brokerage creation and provide any services needed for the establishment.

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Popcorn Technology specializes on providing white label brokerage solutions to novice and experienced brokers. It is possible to organize a new company and get all the necessary financial solutions with the help of Popcorn.

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  • icon Singapore
  • icon Russia
  • icon United Kingdom

Tools for Brokers company’s name speaks for itself. This team of experienced professionals provides advanced technological solutions for the Forex market.

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Offices

  • icon United Kingdom

Finstek is a Fintech technology provider that is offering scalable solutions designed for complex financial applications.

Forex Liquidity Providers


Brokers or “market makers” act only as intermediaries between traders and exchanges, but often they themselves do not participate in trading, but receive income through commissions and providing funds to traders on credit. Brokers only provide traders with access to liquidity in the Forex markets.

Today, online currency trading is available to a wide audience, even if they have little capital. To trade almost any foreign currencies, the user just needs to connect to the Internet and register a brokerage account.

 

What is liquidity in Forex?

Liquidity determines how quickly a trader can exchange one asset for another. For example, buy or sell TSLA shares for USD.  This is one of the most important economic indicators reflecting the completeness of the sector. The faster it can be done with the least losses, the higher liquidity will be. High liquidity means:

  • That the order book is dense enough so that asset volatility is relatively small and the price does not fall/grow too quickly;
  • Low spread between the Bid and Ask prices;
  • At any second a trader can sell an asset at the current market price.
  • Minimal delays in order execution and no slippage.

For example, a real estate purchase transaction can take from several days to several weeks. Therefore, real estate is considered a low liquid asset. Forex or cryptocurrency transactions usually take less than a day – this is an example of assets with high liquidity. In fact, most often trades are executed almost instantly or with small delays when using limit orders.

But this does not apply to all trading pairs. Some of them are less liquid, which means they are much more volatile than more traded pairs such as USD, EUR, GBP, BTC, ETH and others. Particularly low-liquid pairs are sensitive to external events, economic data and news, because of which quotes can suddenly change by a lot. Ultimately, this affects the risks that investors take, potential returns and potential losses. Low liquid pairs can bring high returns, but the risk remains that the investor will lose a significant part of capital. Accordingly, the less liquid the asset is, the higher the risks will be.

 

Signs of low-liquid exchange-traded assets:

Long delays

On the exchanges, orders can be processed for hours or not executed at all given sudden price movements. In this case, the owner runs the risk of not selling the cheapening share or cryptocurrency at the intended price.

High volatility

Sometimes the volatility of low-liquid goods reaches such values ​​that it is impossible to establish actual buy or sell orders due to rapidly changing prices. This increases the time it takes to buy and sell on exchanges, and also leads to additional inconveniences.

Big spread

The spread on low-liquid pairs can reach several percent, which makes them practically unsuitable for short-term transactions. The larger the spread, the more the price deviates from the market value. In this case, the investor will not be able to quickly sell the asset at the current price and, as a result, the transaction may be postponed for a long time.

 

Who supplies liquidity to Forex?

In addition to the broker and the trader, there is another market participant – a liquidity provider or a market maker. It is he who provides assets and currencies for trading, receiving income from the price spread when market participants buy and sell an asset. 

 

What is a liquidity provider?

A liquidity provider is an individual or a company that owns a large volume of an asset. They provide stability and trade by placing orders and controlling counterparty risk.

Liquidity providers are financial institutions such as banks, mutual funds and hedge funds, private companies, large investors and sometimes brokers themselves.

 

Why they need to supply liquidity?

If providers did not provide the markets with assets and currency, the order books would be practically empty, and the volatility would become much higher, due to which the price of an asset could change by 10% in a matter of seconds. In the short term, this would mean huge losses to clients.

 

Where to find a liquidity provider?

On the Finarm website, you will find reliable providers and information on their key services. Finarm is a universal aggregator for FX & CRYPTO brokers that brings together the best liquidity providers.

 

Benefits of Finarm

Speed

With the help of the service, you can quickly find the right partner from the list.

Convenience

Easily find partners and suppliers through a convenient filter search.

Profitability

There will be no high advertising costs and high costs for other means of finding companies.

 

How Customers Access Liquidity

Retail investors cannot directly access exchange transactions of Tier 1 liquidity providers, ie banks and other financial institutions. They will need different products that brokerage companies provide.

 

Conclusions

A liquidity provider is an indispensable element in the financial market, without which currency volatility would have reached enormous values. On the other hand, these organizations are not aimed at helping in trade, but rely solely on their own profits.

Highly liquid markets provide fast selling at market rates, minimal delays in order processing on exchanges and minimal spreads.