Glossary

Prime brokerage & liquidity providers

Prime of Prime (PoP)

A Prime of Prime (PoP) is an intermediary that holds relationships with tier 1 prime brokers and banks and passes that institutional-grade liquidity and credit down to brokers, funds and other firms that cannot meet a tier 1 bank’s direct onboarding or capital thresholds. A PoP aggregates multiple bank and non-bank sources into a single feed and delivers it with execution technology, credit intermediation, risk tools and reporting. Learn how our Prime of Prime service works.

Prime broker

A prime broker is typically a tier 1 bank that provides financing, custody, clearing and consolidated access to liquidity for the largest institutional clients. Because prime brokers impose high minimum balances, credit and volume requirements, most mid-sized brokers and funds reach that liquidity indirectly through a Prime of Prime rather than by contracting with a bank directly.

Liquidity provider

A liquidity provider is a firm that supplies the buy and sell prices — the liquidity — that brokers, funds and trading firms execute against. Tier 1 banks are the primary source of institutional liquidity; a Prime of Prime liquidity provider blends bank and non-bank pricing into a single, deep feed and passes it on with execution, credit, risk tools and reporting. See our liquidity solutions.

Institutional liquidity

Institutional liquidity is the deep, professional-grade pricing available to banks, brokers and funds, as distinct from the retail pricing shown to individual traders. It is characterised by tighter spreads, larger available size and access to tier 1 bank and non-bank sources through prime or prime-of-prime relationships.

Tier 1 bank liquidity

Tier 1 bank liquidity is pricing streamed by the largest global banks that make markets in FX and other instruments. It forms the core of an institutional order book; a Prime of Prime aggregates several tier 1 banks so clients see competitive, executable prices without holding a direct relationship with each bank.

Non-bank liquidity

Non-bank liquidity is pricing supplied by market participants other than tier 1 banks — electronic communication networks (ECNs), trading venues and non-bank market makers. Blending non-bank with tier 1 bank liquidity deepens the order book and can improve pricing, particularly where bank pricing alone is thin.

Aggregation, venues & market structure

Liquidity aggregation

Liquidity aggregation is the process of combining price streams from many sources — banks, ECNs, venues and market makers — into one consolidated order book. Aggregation lets a desk see the best available bid and offer across all providers and route each order to the venue offering the best fill. It is the engine behind our aggregated liquidity.

Liquidity pool

A liquidity pool is the combined, aggregated book of buy and sell interest drawn from multiple sources. In a Prime of Prime context it blends tier 1 banks, ECNs, venues and market makers into one feed; a deeper pool generally means tighter spreads and the ability to fill larger orders with less slippage.

Order book

An order book is the real-time list of buy and sell orders for an instrument, organised by price and size. It shows where liquidity sits on each side of the market and is the mechanism through which aggregated pricing and depth of market are expressed.

Depth of market

Depth of market (DOM) is a view of the order book showing the volume available to buy and sell at each price level away from the top of book. Greater depth means larger orders can be filled with less price impact, which matters for professional desks trading in size.

ECN

An electronic communication network (ECN) is a venue that matches buy and sell orders from many participants anonymously and electronically. ECNs are a key source of non-bank liquidity and support transparent, direct-market-access style execution.

Market maker

A market maker is a firm that continuously quotes both a bid and an offer in an instrument, standing ready to buy or sell and earning from the spread. Bank and non-bank market makers are important sources of liquidity within an aggregated feed.

Execution & access

Straight-through processing (STP)

Straight-through processing (STP) means client orders are passed straight through to underlying liquidity providers and venues without a dealing desk taking the other side of the trade. STP removes the conflict of interest inherent in a dealing-desk model and gives clients pricing they can audit. It underpins our approach to multi-asset execution.

Direct market access (DMA)

Direct market access (DMA) lets a client place orders directly against the order books of underlying venues and liquidity providers rather than against a broker’s internal price. It offers transparency, control over execution and typically lower latency — features systematic and professional desks rely on.

A-book / B-book

A-book and B-book describe how a broker handles client trades. In the A-book model the broker passes trades straight through to external liquidity (STP), earning from spread or commission; in the B-book model the broker internalises trades and takes the other side. PrimeBrokerLiquidity supports full-STP, A-book style execution.

Last look

Last look is a practice where a liquidity provider is given a brief window to accept or reject a trade at its quoted price after receiving the order. It can protect providers against latency arbitrage but, if used aggressively, can increase rejects, so transparency about last-look policies is an important due-diligence point.

Spread

The spread is the difference between the bid (sell) and offer (buy) price of an instrument. Tighter spreads lower the cost of trading; aggregating deep bank and non-bank liquidity is one of the main ways a Prime of Prime compresses spreads for its clients.

Slippage

Slippage is the difference between the price a client expects and the price at which an order is actually filled, usually caused by market movement or insufficient depth between order and execution. Deeper liquidity and lower latency reduce slippage, especially on larger orders and in fast markets.

Latency

Latency is the time delay between sending an instruction — a price request or an order — and it being processed. Lower latency means fresher prices and faster fills, and it is a key determinant of execution quality for systematic and high-frequency strategies.

Technology & connectivity

FIX API

FIX (Financial Information eXchange) is the standard messaging protocol institutions use to send orders, receive prices and manage trades electronically. A FIX API is the most direct, low-latency way for a broker or fund to connect to a liquidity provider’s aggregated feed. See our connectivity and technology.

Bridge (MT4/MT5/cTrader)

A bridge is software that connects a trading platform such as MT4, MT5 or cTrader to an external liquidity provider, translating platform orders into the provider’s feed and routing them for STP execution. Bridges let brokers offer institutional liquidity through the platforms their clients already use.

Instruments & credit

CFD

A contract for difference (CFD) is a leveraged derivative in which two parties settle the change in an instrument’s price between open and close, without owning the underlying asset. CFDs let clients gain exposure to indices, commodities, equities and other markets, and are a common component of multi-asset liquidity.

Multi-asset liquidity

Multi-asset liquidity is access to pricing across several asset classes — for example FX, metals, indices, commodities, equities and CFDs — from a single aggregated feed and one integration. It lets a desk cover many markets through one relationship rather than integrating a separate provider per asset class. See the full range of markets and instruments.

Margin & credit

Margin is the collateral a client posts to support leveraged positions; credit is the counterparty limit a provider extends to allow trading beyond posted funds. Prime-of-prime relationships centralise margin and credit intermediation, letting clients access tier 1 liquidity without a direct credit line to each underlying bank.

Tier 1 liquidity provider

A tier 1 liquidity provider is a major global bank that participates directly in the interbank foreign-exchange market and streams executable bid and ask prices. Tier 1 providers offer the deepest liquidity and tightest pricing but require substantial credit and volume, which most brokers reach indirectly through a prime of prime. See tier 1 liquidity providers.

FX prime brokerage (FXPB)

FX prime brokerage (FXPB) is a bank service that lets a client trade FX with multiple executing dealers while maintaining a single credit and settlement relationship with the prime broker, who intermediates the credit. Firms too small to qualify for a direct FXPB relationship access equivalent liquidity through a prime of prime. See FX prime brokerage vs prime of prime.

Give-up

A give-up is an arrangement in FX prime brokerage where a client trades with an executing dealer but gives up the trade to the prime broker for credit and settlement, so the prime broker becomes the counterparty of record. Give-up agreements are the mechanism through which prime-broker credit intermediation works.

C-book (hybrid model)

A C-book, or hybrid model, is a risk-management approach in which a broker dynamically routes some client order flow to external liquidity (A-book) while internalising the rest (B-book), based on client profile, instrument and exposure. It lets a broker hedge risky or profitable flow externally while retaining lower-risk flow. See what a C-book is.

White-label brokerage

A white-label brokerage is a ready-built trading operation — platform, back office and liquidity connectivity — that a company rebrands and runs under its own name without building the technology itself. The provider supplies the infrastructure and often the liquidity, while the operator handles branding, onboarding, marketing and, where required, regulation. See white-label brokerages.

Grey label

A grey label is a partly branded brokerage arrangement in which an operator uses more of the underlying provider's brand and infrastructure than a full white label, with lighter customisation and lower cost. It sits between an introducing-broker model and a full white-label brokerage.