Looking for new Liquidity Providers? The Best Bank LPs in 2020
Forex trading refers to the ability to buy and sell a currency pair without creating a huge impact on its exchange rate. Hence, a currency pair can be regarded as having a high level of liquidity when it can be bought or sold easily.
The forex market thrives on liquidity, as it makes the market extremely efficient. Forex liquidity ensures an easier transaction flow, cheaper costs of transactions as well as more competitive pricing of currency pairs.
There are basically two types of liquidity providers in forex: Tier 1 and Tier 2 liquidity providers. Specifically, the Tier 1 liquidity providers are usually large banks.
Large banks have extensive forex departments.These liquidity providers make markets on all currency pairs and offer the tightest spreads. And these large banks have extensive operations to support their foreign interbank dealers. Due to their involvement in servicing large companies that require foreign exchange transactions, such large banks become key liquidity providers in the forex market.
The following image depicts the world’s largest Tier 1 liquidity providers that currently provide liquidity to the forex market as market makers.
It should be noted that forex brokers usually connect with a number of liquidity providers to obtain better dealing rates and spreads. In doing so, they can offer their customers the best price obtainable from multiple liquidity providers. For the full liquidity provider list across the world and their details, please visit Fazzaco’s Liquidity Provider Directory: https://www.fazzaco.com/company/5dfc6888a9c29000013f5a90
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