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How To Become a Liquidity Aggregator: A Step-by-Step Guide

How to Become a First-Class Liquidity Provider?

A liquidity aggregator is an essential assistant that paves the brokers’ path toward success. A brokerage company connects its order book to trustworthy liquidity providers. It concerns many markets, such as Forex, Crypto Spot, Commodities, Metals, etc.

How important is a liquidity provider (LP)?

LP are mediators between brokers/exchanges and market-makers. It’s impossible to interact directly, as market-makers work with large deals only, and brokerage companies cannot fill them. 

That's why banks and hedge funds execute such orders. Meanwhile, brokers need to pay a liquidity provider fee depending on trading volumes and a chosen company to cooperate with. 

Key steps to becoming a liquidity provider

When a specific company wants to operate as a liquidity provider, it needs to register a company. Brokers deal with licensed liquidity aggregators only. New providers may get a license in Central America or Oceania, where there's weak financial regulation (Belize or Vanuatu), while trustworthy LPs are licensed in the European Union (Cyprus, Estonia, or Malta). 

When you’ve got a license, focus on LP contracts. Start cooperating with Tier 1 banks or hedge funds, Prime-of-Prime brokers and liquidity pools. It allows your customers to access the deep liquidity pools. Moreover, contracting different institutions is a vital step on how to start a forex business

Moreover, you may also provide liquidity for other markets (for example, cryptocurrency). In this case, sign contracts with white label cryptocurrency exchanges, crypto brokerage companies, and other major players to create a large liquidity pool for your clients. 

Going deep into technologies

The following key step of building a liquidity provider is integrating the first-class White Label FX software. It’s a required technology for interaction between brokers and market makers. 

First, implement a top-notch matching engine that can process 10,000 transactions per second or more. It’s better to deal with reliable technology providers who are interested in skyrocketing your Forex brokerage business.

Further, there are some other vital technologies for a smooth LP operation. Trading experts note that FIX API Connector and bridge solutions unlock full access to FX and other markets. 

Cooperation conditions for Forex brokers

If you follow all the above advice, your liquidity aggregator is ready to start the Forex market. Remember that brokers expect to get favourable terms of cooperation. They should be transparent and understandable for brokerage businesses; this is why they need to learn how liquidity providers make money.

It’s better to establish an agreement with clear terms of partnership and no hidden payments or fees. Further, some special requirements ensure trust in the liquidity provider. 

B2Broker as a top-notch LP solution

Newer brokers learn the best liquidity providers list, and B2Broker always holds the leading positions. The reason is simple: B2Prime, the company's subdivision, provides access to the deepest liquidity pools in the Forex market. B2Prime provides PoP liquidity for Forex, Crypto CFDs, commodities, metals, indexes and many other markets.

If your brokerage business needs an effective White Label Forex option, request for a first-class company and get access to the largest liquidity pools with instant execution of orders.

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Syandita Malakar
Hi guys this is Syandita. I started Business Module Hub to help you all to post updated articles on technologies, gadgets. Although I love to write about travel, food, fashion and so on. I quite love reading the articles of Business Module Hub it always update me about the new technologies and the inventions. Hope you will find Business Module Hub interesting in various way and help you accordingly. Keep blogging and stay connected....!
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