LP Full name: Foreign Exchange Liquidity provider.
It is the recipient of orders from customers clearing the international market.
Liquidity providers provide liquidity data services between banks to obtain the best prices and feed back to downstream retail forex brokers.
These liquidity providers focus on liquidity technology development and provide technical support for the STP/ECN model of small and medium foreign exchange brokers.
In addition, liquidity providers often have links with more than two large banks and often use another as a backup to ensure continued stability of liquidity.
Mainstream international liquidity providers are typically active in Europe, the US and other markets and have decades of experience trading direct derivatives.
As the main body of the international market, large international banks are located at the top of the industrial chain.
According to the Bank for International Settlements, about 70 percent of the liquidity in the foreign exchange market comes from international banking giants such as Citibank, Deutsche Bank, jpmorgan Chase, HSBC and others.
These international banks will quote based on their own risk control standards for foreign exchange liabilities and foreign exchange assets, and each bank will have different wind control standards for each, resulting in a final quotation that is different from other banks.
As a result, the quotes we see in foreign exchange transactions are typically composite quotes from a number of large banks.
Quotations from major international banks constitute the interbank foreign exchange market.
With a liquidity provider (LP), there is no conflict of interest between the broker (platform) and the client.
Customer orders are connected to the international market through the LP trading account, competing with international market rivals, truly participating in the foreign exchange market, and profiting from market fluctuations.
As Europe’s energy crisis intensifies supply constraints, oil prices have enjoyed a third straight pre-Christmas rally and gold has held steady.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
