For a trader, an honest and reliable broker is not just a stable service provider with a user-friendly interface and profitable commissions. Order execution speed and the absence of slippage also play an important role. That is, the broker should first and foremost think about liquidity aggregation.
What is liquidity aggregation?
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Aggregation is the integration of elements into a single system. Liquidity is the ability to quickly and easily exchange one asset for another. Liquidity aggregation is the systematization of offers to buy or sell an asset from suppliers and their provision to interested market participants. The main purpose of aggregation is to give the broker’s clients an opportunity to buy assets at market prices.
What functions do hubs perform?
Hubs are control centers, liquidity-oriented software. Hubs perform the following functions:
- Liquidity aggregation with additional features (spread setting, client margins, multiple price channels, etc.).
- Risk management. Based on flexible use of the A-book and B-book models, i.e., by redirecting traders between A/B books depending on the trading strategy and market volatility. Or through a model change when the established volume limit is exceeded.
- Automatic switching to another LP. If the data flow from the main liquidity provider suddenly stops.
- Reporting and monitoring. The hub provides a risk assessment interface, places statistics into convenient databases, and allows one to view logs.
A properly selected liquidity management center ensures the reliability of a broker’s services, optimizes risks and increases the customer loyalty level. More details are available at https://takeprofittech.com/.
Overview of liquidity management tools
The optimal set of solutions for a broker includes two components:
- A liquidity aggregation hub. The main characteristic of a hub that you need to consider when choosing is the price/functionality ratio. Available providers, a clear interface, and quality of support are also important.
- Liquidity bridge. A server plugin that redirects trades between A-book and B-book without restarting.
The advantage of working with a technology provider compared to maintaining your own team of programmers is a fresh perspective and experience in developing versatile solutions. In addition to the implementation of ready-made solutions, the developer is ready to upgrade software products to the broker’s requirements.
How to choose a software provider
The criteria for supplier selection are market experience, supported assets, fault tolerance, results of software implementation by other brokers. Other important considerations are the conditions for subsequent software support, the possibility of personalized function customization, quality of consulting and price.
The Liquidity aggregation page provides a comparative analysis of three competitors – Takeprofit Hub, OneZero and xCore. The broker can decide which additional features are of paramount importance to him, and which ones can be dispensed with.
