Liquidity Hub

Who Uses Liquidity Hub

Liquidity hubs are commonly used by:

• retail forex brokers;
• institutional brokers;
• liquidity providers;
• prime brokers;
• crypto brokers and exchanges;
• prop trading companies;
• white-label providers;
• fintech companies operating multiple trading platforms.
  
  

Key Features of Liquidity Hub

A liquidity hub combines several functions within one infrastructure layer. These functions help brokers manage how quotes are received, how orders are executed, and how liquidity is distributed across trading platforms and client groups.

Liquidity provider connectivity

A liquidity hub connects a broker’s trading platform with banks, non-bank liquidity providers, ECNs, exchanges, market makers, and other pricing sources.

Depending on the broker’s setup, the hub can support:

• one or multiple liquidity providers;
• several trading platforms and servers;
• separate connections for different asset classes;
• primary and backup liquidity sources;
• FIX API and other connection protocols;
• custom integrations with external systems.

This allows the broker to manage all liquidity connections through one system.

Quote aggregation

When several liquidity providers are connected, each source may offer different bid and ask prices, market depth, and available volume.

A liquidity hub collects these quotes and creates a consolidated price feed.

Aggregation may include:

• comparison of bid and ask prices from several providers;
• selection of the best available prices;
• consolidation of market depth;
• removal of invalid or outdated quotes;
• prioritisation of selected liquidity sources;
• separate aggregation rules for different symbols.

The broker can use the resulting feed for client pricing and order execution.

Order routing

A liquidity hub determines where each order should be sent.

Routing rules can be based on:

• trading symbol;
• order volume;
• account or client group;
• liquidity provider;
• available market depth;
• price;
• execution model;
• time or trading session;
• risk profile;
• current exposure.

For example, large orders can be routed to a liquidity provider with sufficient market depth, while smaller orders can be handled through another execution flow.

A-book, B-book, and hybrid execution

A liquidity hub can support several execution models within the same brokerage infrastructure.

With A-Book execution, client orders are routed to external liquidity providers.

With B-Book execution, orders are managed internally by the broker.

A hybrid model combines both approaches. Orders can be routed externally or kept internally according to predefined criteria.

These criteria may include:

• account group;
• trading volume;
• client profitability;
• trading strategy;
• symbol;
• exposure level;
• market conditions.

This gives the broker greater control over execution and risk management.

Pricing and markups

A liquidity hub allows brokers to control the prices distributed to trading platforms and clients.

Pricing settings may include:

• fixed markups;
• spread markups;
• bid and ask adjustments;
• markups by symbol;
• markups by account group;
• separate conditions for different platforms;
• time-based pricing rules;
• different feeds for different client segments.

This allows the broker to create several account types and trading conditions within one infrastructure.

Execution settings

Brokers can configure how orders are processed under different conditions.

Execution settings may include:

• slippage limits;
• execution delays;
• order rejection rules;
• partial fills;
• fill-or-kill conditions;
• minimum and maximum order volume;
• price deviation limits;
• execution rules by symbol or account group.

These settings help the broker control execution quality and reduce the impact of abnormal market conditions.

Liquidity distribution

A liquidity hub can distribute pricing and execution services across several trading platforms, servers, or institutional clients.

One liquidity setup can be used to:

• supply prices to several MetaTrader servers;
• connect multiple trading platforms;
• provide liquidity to white-label brokers;
• create separate feeds for different clients;
• manage institutional and retail flows;
• distribute quotes without exposing liquidity provider details.

This is particularly useful for liquidity providers, prime brokers, and brokers operating several brands or trading environments.

Backup liquidity and failover

Liquidity provider connections may become unavailable because of technical issues, maintenance, or market conditions.

A liquidity hub can switch pricing and execution to a backup source when the primary connection fails.

Failover settings may include:

• primary and secondary liquidity providers;
• automatic connection switching;
• symbol-level backup sources;
• quote availability checks;
• spread and price quality checks;
• connection status monitoring;
• automatic restoration of the primary source.

This helps maintain pricing and execution during liquidity provider downtime.

Monitoring and reporting

A liquidity hub gives brokers access to real-time information about liquidity and execution.

Monitoring tools may display:

• liquidity provider connection status;
• current bid and ask prices;
• spreads;
• market depth;
• rejected orders;
• execution time;
• slippage;
• trading volume;
• order routing results;
• system errors and warnings.

Historical reports can help the broker compare liquidity providers, review execution quality, and identify technical or pricing issues.

Risk management

Liquidity hubs can also support broker risk-management processes.

Risk controls may include:

• exposure monitoring;
• position limits;
• routing by risk profile;
• automatic changes between A-Book and B-Book execution;
• symbol-level risk settings;
• volume-based routing;
• controls for high-risk traders;
• alerts when predefined limits are reached.

These tools allow dealing and risk teams to respond to changes in trading activity and market conditions.