Selecting the Appropriate Liquidity Provider: From Several LPs to a Single PoP

The rise of global financial markets has created fresh possibilities for small and medium-sized enterprises, disrupting the long-standing supremacy of commercial banks and large corporations in areas such as forex, cryptocurrency, and other financial domains. Any company can establish a solid foothold in the worldwide market thanks to digital advancements and online platforms. However, establishing a brokerage firm remains a challenging endeavour. Access to dependable and consistent liquidity is essential for any aspiring retail broker to thrive.

This piece seeks to delve into the various reservoirs of liquidity available, underscore the importance of prime of prime liquidity providers, offer advice on engaging with non-bank liquidity sources, and identify a trustworthy and top-tier liquidity provider.

Selecting the Correct Liquidity Partner: Crucial Considerations

It is of utmost importance for a brokerage to carefully select a liquidity provider suitable for their growth and success. To make an informed decision, several critical factors must be considered. Let’s explore these key elements together:

Pricing and Reputation

To achieve steady expansion, it is crucial to make certain that the pricing arrangement of the LP is transparent and consistent with your financial objectives. Have a complete understanding of the fee plan to prevent any unforeseen expenses.

Security and Technology

The LP must prioritise security measures by implementing advanced solutions and conducting regular updates to safeguard your funds. Additionally, they should offer modern digital tools such as real-time data feeds and white-label options to enhance your brokerage’s capabilities without incurring extra costs.

Operational Scale

Establishing your brokerage’s objectives and operational strategy is crucial to its success. Assess your requirements and determine how they align with the LP’s offerings, whether you aim to serve a specific market or a wide range of currency pairs.

Efficiency and Value of Prime Liquidity Providers

Prime of Prime (PoP) agencies provide a solution for smaller and mid-sized brokerages to access high-tier liquidity services by dividing tier-1 resources into smaller, more manageable portions. By offering a $100,000 monthly service from a tier-1 provider to multiple clients in smaller increments for $15,000, PoPs make it more affordable for these brokerages to benefit from such services.

This approach allows tier-1 companies to generate significant returns, while smaller to medium-sized brokerages can take advantage of tier-1 services at a reduced cost. Point of Presences (PoPs) are an ideal choice for mid-sized agencies that face high tier-1 fees and find the offerings from ordinary LPs inadequate.

Introducing PoPs brings greater diversity and competitiveness to the trading platform, expanding brokerage capabilities beyond traditional currency pairs to include energy assets, precious metals, indices, and advanced trading mechanisms such as margin trading and CFDs.

Brokerages searching for comprehensive services at a lower tier-1 price point can rely on PoPs. This is because PoPs maintain strict partnership standards with tier-1 firms, ensuring their reputation and reliability.

Final Thoughts

Brokerage firms, especially startups, must make a good impression on their audience by partnering with a dependable liquidity provider. PoP providers are often the preferred choice as they offer a variety of benefits that are typically not provided by other liquidity providers.

Photo of author



Hello, I'm Dave! I'm an Apple fanboy with a Macbook, iPhone, Airpods, Homepod, iPad and probably more set up in my house. My favourite type of mobile app is probably gaming, with Genshin Impact being my go-to game right now.

Read more from Dave


Apps UK
International House
12 Constance Street
London, E16 2DQ