Forex Trading Broker: STP Model (A-book) vs Market Making (B-book)

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The forex brokerage industry mainly consists of two prominent business models, namely: A-book (also known as a non-dealing desk) and B-book (also referred to as market maker). 

These models essentially define the way brokers provide liquidity for transactions made by clients on their trading platforms. 

In simpler terms, each Broker can decide if they want to be an intermediary for a transaction or a counterparty. However, it does not necessarily mean that these two business models are mutually exclusive, neither are they the only options. 

What is A-book in Forex Trading?

Also known as STP (Straight Through Processing) broker or a non-dealing desk broker, an A-book broker acts as an intermediary that sends trading orders directly to their liquidity providers. Such brokers do not operate an internal dealing desk and make money by charging a specific commission on volumes of orders, or by increasing spreads

This ensures there are no conflicts of interest as Brokers earn the same amount of money with both winning and losing traders. 

Additionally, by dealing through an A-book broker, traders cut out both the market maker and their dealing desk, who will likely profit from their transactions.

Characteristics of the STP Model (A-book)

The key advantage of the A-book broker model is the fewer conflicts of interest as clients’ profits do not have a negative impact on their operations.

Furthermore, STP brokers offer greater liquidity as prices are derived from multiple market participants, rather than just one liquidity provider. This, in turn, leads to better fills, tighter dealing spreads, and more accurate quotes.

Because an STP broker model often requires a ‘non-dealing desk’, this means that Brokers are more transparent with the client’s trades.

However, it’s worth noting a particular downside to using A-book, which is, because orders are processed directly to the liquidity pool, traders often witness variable spreads that can be very tight when liquidity is high, and vary substantially during low-volume periods. 

forex trading
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What is Market Making (B-book)?

Also known as a market maker, the B-book broker may have an internal dealing desk that can choose to trade against their clients, where it acts as a counterparty to their trades. 

For better context, if a trader places a purchase order on the broker’s platform, the broker can choose to fulfill the order using their internal liquidity pool, thus completing the order without having to pass it on to an external liquidity provider. 

As a result, this type of forex business model could generate a significant conflict of interest between brokers and their clients, as a client’s losing trade would mean a gain for the broker’s internal dealing desk and vice versa.

Characteristics of Market Making (B-book)

Trading with a B-book broker can be advantageous to forex traders as they can get guaranteed fills on their trades. Furthermore, even when market liquidity is low, forex traders can get still get their orders fulfilled since the Broker has its own liquidity pool. 

Additionally, the B-book model typically offers fixed spreads, which are charged every time a trader opens or closes a position. 

This has some advantages and negative aspects. For example, fixed spreads make it easier to trade when there are market shocks. However, at the same time, one will have to improve their trading strategy to account for the fixed spreads.

This is why larger forex brokers tend to utilize a hybrid model that entails placing transactions on either the A-book or B-book depending on traders’ strategies and profitability.


In general, the hybrid model is the most common in the forex market. In deciding which broker to trade with, traders should consider the pros and cons of both A-book and B-book brokers and how well they fit with their trading strategy, risk management structure, and cost considerations.

The article is a part of our comprehensive guide on “Forex trading

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