Liquidity Routing Principles

A-book and B-book: Liquidity Routing Principles

All trader requests submitted to the broker can be executed using one of two methods. Let’s analyze the difference between A-book and B-book brokers and the ways to use these opportunities in your business.

An A-book broker is a financial intermediary that directs all transactions to counterparties (liquidity providers) in the external market.

The broker makes a profit by taking commission from transactions or a percentage of the spread between the purchase and sale price, or by providing other useful services to traders. The income does not depend on how the client closed the transaction: at a loss or with a good profit.

The disadvantage is that in order to work using this model, the broker must have signed agreements with liquidity providers. This makes the broker’s margin more expensive, and it is no longer always profitable for the trader to continue trading.


The B-book broker, as a market maker, processes the application without contacting liquidity providers, within the company (the so-called “kitchen,” aka Dealing Desk). In this case, the broker himself acts as a counterparty.

With this approach to trading, the broker’s income depends on the clients’ losses. But it will be impossible to earn money on this — in this case, a lot of dissatisfied customers will appear and the broker will suffer losses sooner or later. It turns out that a broker doesn’t need to play on his own terms if he needs a stable, reliable long-term business.

Both models have pros and cons for both traders and the company. The market is unpredictable, and there are no definite ways to only trade in the green. A hybrid approach allows to use only the best from each model and neutralize their respective shortcomings.

Hybrid Model

With mixed order management, the broker processes smaller orders by itself, and sends large orders to liquidity providers. Risks are hedged in this manner.

Technically, this model is more difficult to execute, because the broker needs to route applications somehow. A special plugin will help solve the order management and liquidity issues.

The mt5 bridge service executes applications for the A-book, B-book and A+B-book models, acting as an intelligent router. The system itself determines how to execute the order. To execute applications of different types, the system doesn’t need to reconnect and restart the server, since all three solutions can be executed simultaneously.

Order distribution is based on an algorithm that analyzes the order and trader data: the deposit and leverage size, the degree of risk, the presence of stops. Based on this information, the system decides on the order execution method. The tool does not overload the server. It is resistant to loads, so it can manage any order volume.

The tool is controlled through a simple user interface. The broker sets up the conditions for the execution of traders’ orders using one of the two methods. The plugin versions are compatible with MT4 and MT5, which means they will suit almost any broker.

How to connect and configure the bridge

The bridge is connected and fully configured by our technical specialists. The broker receives a ready-made solution and recommendations for use. All issues related to maintenance, updating and support are solved through messenger chats.