Liquidity Management - a game changer in FX brokerage

Nicholas Pratt examines the issues shaping FX brokers use of liquidity management services and how they can be the difference between success and failure in an increasingly competitive market.

First Published: e-Forex Magazine 51 / FOCUS / April, 2013

The ability to harness the growing number of liquidity aggregation tools available is a critical issue for FX brokers both institutional and retail. A number of varied factors influence a brokers’ choice of available liquidity provider – such as credit quality as well as price – and all of these factors have to be considered when building an aggregated liquidity management tool. For example, seamless support for electronic communication network (ECN) brokerage operations, low latency access to liquidity sources, provision of real-time risk toolsets, support for market maker and B-Book activity and integration with leading trading platforms are all relevant factors. For retail FX brokers, liquidity management is especially important, says Andrew Ralich, chief executive and co-founder of oneZero Financial Systems, a developer of automated trade execution and routing software for the FX market. “As the number of participants in the FX retail space continues to grow, brokers are under...continued

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