How do Liquidity Providers Make Money?

Sep 9, 2021

How do Liquidity Providers Make Money?

Forex is a marketplace with a daily turnover of more than $7 trillion, and newcomer traders get opportunities to capitalize on buying and selling assets. Private traders cannot access the marketplace directly – brokerage platforms act as mediators. As for FX brokers which grow in number steadily they need “help” as well – liquidity providers (LPs) make it possible to fulfill traders’ orders.

Are liquidity providers a must-have partner for a Forex broker?

Brokerage companies are roughly divided into two categories:

1) FX brokers who act as market makers;
2) FX brokers that deal with LPs.

Companies from the first category rely on their trading audiences, as signed-up users maintain liquidity by placing orders. While talking about top trading pairs, traders may get their orders closed at market prices. As for less popular pairs, gaps, slippage, and high spread appear. Traders cannot fulfill all the placed requests.

FX liquidity providers connect brokerage companies and market makers (BNB Paribus, JP Morgan, and other institutions); this is why orders placed by traders are executed by the largest banks and funds.

How do Liquidity Providers Make Money?

Expenses of brokerage companies. Ways liquidity providers make money

A newer brokerage company tries to cut expenses as much as possible, and a business owner faces the necessity to deal with top liquidity providers. What are the expenses of a broker?

1) Spread and swap;
2) Additional fees.

What is the spread? Such a term is used to mark the difference between bid and ask prices. For instance, the most reliable providers offer spreads from 0. The less popular a trading pair is, the higher the spread index grows.

For instance, the EUR/USD is the most traded pair in the Forex market, and reliable LPs offer spreads starting from 0. That means no difference between bid and ask prices (1.18141 and 1.18141). As for less demanded pairs (e.g., GBP/JPY), spreads grow to 0.015 or even more (bid price is 151.504 and ask price is 151.519).

Spread indexes are not something fixed – they frequently change, depending on market activity; meanwhile, top providers make those changes almost invisible for a trader.

While talking about fees, some LPs charge commissions from a broker for letting a company access the world’s largest liquidity pools. Those fees are imposed from the overall trading volumes.

When a brokerage company understands ways how does a liquidity provider make money, it is a challenging task to meet a reliable partner.

B2Broker company provides minimum spreads for more than 70 FX trading pairs, while an order execution takes from 12 milliseconds. On top of the FX spot market liquidity, B2Broker supports margin trading, offering leverage multipliers up to 100:1.

All payments are transparent and discussed at the beginning of the partnership. The company never charges hidden fees, as B2Broker wants partner businesses to develop and reach new highs.

Wondering how these solutions can boost your business?

Leave a request, and let our experienced team guide you towards unparalleled success and growth.

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.

    Subscribe Our Newsletter

    What is Crypto Leverage Trading And How Does It Work?

    Constantine

    What is Crypto Leverage Trading And How Does It Work?

    Trading is a fundamental concept of economics involving the purchase and sale of valuables.

    Trading
    Insuring Your Future: What Type of Insurance to Buy

    Alexander

    Insuring Your Future: What Type of Insurance to Buy?

    In life, we often face uncertainties and unexpected events that can have a significant impact on our financial well-being. For instance, an unexpected medical emergency or job loss can leave us without any savings or source of income.

    B2BROKER Liquidity B2BROKER Liquidity
    Sponsored
    Cristian

    Why Copywriting Is Important for Business Growth
    Discover why copywriting is essential for building trust, shaping brand identity, and driving business growth. Learn how clear, strategic writing turns readers into loyal customers.

    discover
    Crypto Is ‘Top Contender’ for Correction, Money Managers Say
    Crypto Is ‘Top Contender’ for Correction, Money Managers Say

    Cryptocurrencies were eventually accepted by institutions in 2021, according to several estimates. The asset class, according to those same money managers, is due for a huge selloff next year.

    Crypto
    Contact us bg

    Contact Us

    Contact the Liquidity Provider
    for any questions and advertising inquiries

      Please fill out this contact form to get in touch with us

      / 3000

      By clicking “Get in touch” button, you agree to the privacy policy

      Successful!
      Thank you for your request.
      We will contact you shortly.
      Close

      Constantine

      Financial Planning in the Cryptocurrency Era — Master Crypto and Digital Asset Strategies

      Financial Planning in the Cryptocurrency Era

      Hazem

      Best Platforms to Trade Perpetual Futures in 2025

      Best platforms to trade perpetual futures in 2025

      Alex

      Top 10 Fintech Website Development Agencies for 2025

      Best Fintech Website Development Agencies for 2025

      Сonstantine

      Internal vs External Range Liquidity In ICT Trading Explained

      Internal vs External Range Liquidity In ICT Trading

      Constantine

      Portfolio Backtesting — Tools, Metrics, and Methods Explained

      Portfolio Backtesting

      Сonstantine

      ICT Trading Explained: Smart Money Concepts, Tools and Setups

      ICT Trading Explained

      Сonstantine

      CFD Trading Strategies: A Practical Guide to Risk and Execution

      CFD Trading Strategies

      Alexander

      What is a Fair Value Gap? A Guide to Trading Market Imbalances

      What is Fair Value Gap

      Vitaliy

      Triangle Patterns in Trading: Mastering Ascending, Descending & Symmetrical Strategies for Maximum Profit

      Triangle Patterns in Trading: Ascending, Descending & Symmetrical Guide

      Alexander

      What Is COTI? Payments, Token & Price Prediction

      What is a COTI coin

      Constantine

      Best Copy Trading Software in 2025

      Best Copy Trading Software in 2025

      Alex

      What Is an AI Agent? The Future of Finance Explained

      AI Agent Explained

      Constantine

      How to Start a Liquidity Provider Business?

      How to Start a Liquidity Provider Business

      Constantine

      How to Start a White Label Brokerage?

      How to start a white label brokerage

      Constantine

      How to Start a Multi-Asset Brokerage?

      How to Start a Multi-Asset Brokerage

      Hazem

      Crypto Ransomware – How They Happen and How to Avoid Them

      Crypto ransomware explained

      Constantine

      Best Web3 Browsers in 2025

      Best Web3 Browsers

      Constantine

      Best DAO Projects in 2025

      Best DAO projects in 2025

      Alexander

      Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

      crypto nodes that pay

      Alex

      Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

      Pi Network Explained

      Constantine

      Triple Net Lease: Meaning, Benefits, and Strategies Explained

      Triple Net Lease

      Constantine

      Hanging Man Pattern: How to Identify and Trade It Effectively

      Hanging Man Pattern

      Alex

      5 Infinite Banking Mistakes That Could Cost You Thousands

      Infinite Banking Mistakes to Avoid

      Aleksander

      Solana Firedancer: Solving Solana’s Biggest Problems with a New Engine

      Solana Firedancer explained
      liquidity-provider-logo
      • News
        • Stock Market Forecast
        • Stocks
        • Banks and Finance
        • Companies
        • Crypto
        • Forex
        • AI
        • Technology
        • DeFi
        • NFT
      • Articles
        • Crypto Payments
        • Trading
        • Crypto Exchange Business
        • Forex Business
        • Fintech
        • Liquidity
        • FinTech Awards
        • Blockchain
        • Investing
        • NFT
        • DeFi
      • More
        • Videos
        • Liquidity Providers List
        • Crypto Payment Providers
        • White Label Brokerage Platforms
        • Broker CRM Platforms
      [email protected]

      © 2024 Liquidity Provider. All Rights Reserved

      Privacy Policy Cookie Policy
      This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.