Dictionary

A-Book

An execution model where the broker passes client orders directly to external liquidity providers without taking the opposite side of the trade.

Also: Straight-Through Processing, STP

Aggregation

The process of combining liquidity from multiple providers into a single stream to offer tighter spreads and deeper order books.

Ask Price

The lowest price at which a seller is willing to sell an asset; also known as the offer price.

Also: Offer Price

B-Book

An execution model where the broker acts as counterparty to the client, internalizing the order rather than routing it to an external liquidity provider.

Best Execution

The obligation for a broker to execute client orders at the most favorable terms reasonably available, considering price, speed, and likelihood of execution.

Bid Price

The highest price a buyer is willing to pay for an asset at a given moment.

Chicago Leap

A low-latency infrastructure solution by NDD designed to minimize execution delays through proximity to major liquidity venues.

Commission

A fixed or per-lot fee charged by a broker for executing a trade, often used in A-book/NDD models as an alternative to spread markup.

Composite Liquidity

A blended liquidity stream constructed by aggregating quotes from multiple liquidity providers into a single unified feed.

Conflict of Interest

A situation where a broker's financial interest opposes the client's interest, most commonly in B-book models where the broker profits from client losses.

Dealing Desk

A broker model that manually or algorithmically manages client order flow, often acting as counterparty (B-book) rather than routing to external LPs.

Depth of Market

A real-time display of buy and sell orders at various price levels, showing available liquidity at each price.

Also: DOM, Level 2, Order Book

Direct LP

A single liquidity provider connection where orders are routed directly, without aggregation or composite blending.

Also: Direct Liquidity Provider

Electronic Communication Network (ECN)

An automated system that matches buy and sell orders from multiple participants, allowing direct trading without a dealing desk or market maker.

Also: ECN

Execution Analytics

Quantitative metrics and dashboards measuring trade execution quality, including fill rates, slippage distributions, and latency breakdowns.

Execution Policy

A formal document describing how a broker handles order routing, price formation, priority logic, and conflict-of-interest mitigation.

Execution Quality

An aggregate measure of how well trades are executed, factoring in speed, price improvement, fill ratio, and slippage.

Fill Ratio

The percentage of an order that is successfully executed, calculated as filled volume divided by total requested volume.

Also: Fill Rate

FIX Protocol

Financial Information eXchange — an industry-standard messaging protocol used for real-time electronic communication of trade orders and execution between brokers, LPs, and exchanges.

Also: FIX, FIX 4.4, FIX 5.0

FusionGate

An institutional-grade trading gateway by NDD that provides direct connectivity to multiple liquidity venues and execution infrastructure.

Gapping

A sharp price movement where the market jumps from one price level to another with no trading activity in between, often occurring at market open or during major news events.

Also: Price Gap, Gap Risk

Hybrid Model

An execution model that combines A-book and B-book approaches, routing different orders or client segments through different execution paths.

Internalization

The practice of executing client orders internally within the broker rather than routing them to external liquidity providers or exchanges.

Kill or Fill

An order instruction that requires immediate and complete execution; if the full order cannot be filled instantly, the entire order is canceled.

Also: Fill or Kill, FOK

Last Look

A practice where a liquidity provider retains the right to reject or re-quote an order after receiving it, introducing a brief delay before execution.

Latency

The time delay between submitting a trade order and its execution, typically measured in milliseconds.

Liquidity Aggregation

The process of pooling quotes and depth from multiple liquidity providers to create a more competitive and resilient pricing environment.

Liquidity Provider

A financial institution (bank, prime broker, or ECN) that supplies buy and sell quotes, enabling brokers to fill client orders.

Also: LP

Lot Size

The standardized quantity of a financial instrument in a single trade, with a standard lot in FX being 100,000 units of the base currency.

Also: Standard Lot, Mini Lot, Micro Lot

Market Impact

The price movement caused by the execution of a large order, where the act of trading itself moves the market against the trader.

Market Maker

An entity that continuously quotes both buy and sell prices, profiting from the spread and providing liquidity to the market.

Markup

An additional amount added to the raw spread by a broker as a revenue model, widening the effective spread for the client.

Negative Slippage

When an order executes at a worse price than expected, resulting in an unfavorable outcome for the trader.

No Dealing Desk (NDD)

A broker execution model that routes client orders directly to liquidity providers without manual intervention or dealing desk involvement, eliminating inherent conflicts of interest.

Also: NDD, No Dealing Desk

Order Routing

The mechanism by which a broker directs client orders to specific liquidity providers or execution venues based on predefined rules.

Partial Fill

When only a portion of a trade order is executed due to insufficient liquidity at the requested price level.

Payment for Order Flow (PFOF)

A practice where a broker receives compensation from a market maker or third party for routing client orders to them, creating a potential conflict of interest.

Also: PFOF

Pip

The smallest standard unit of price movement in a currency pair, typically the fourth decimal place (0.0001) for most FX pairs.

Also: Point in Percentage

Positive Slippage

When an order executes at a better price than expected, resulting in a favorable outcome for the trader.

Also: Price Improvement

Price Improvement

When a trade executes at a better price than the prevailing quote at the time of order submission, representing a measurable benefit to the client.

Price/Time Priority

An order matching rule where orders are filled first by best price, then by earliest submission time among orders at the same price.

Raw Spread

The unmodified bid-ask spread as received directly from liquidity providers, before any broker markup is applied.

Rejection Rate

The proportion of submitted orders that are rejected by the broker or liquidity provider before execution.

Also: Reject Rate

Requote

When a broker offers a new price instead of executing at the originally requested price, typically during volatile market conditions.

Slippage

The difference between the expected price of a trade and the actual execution price, which can be positive or negative.

Smart Order Routing (SOR)

An automated algorithm that analyzes multiple liquidity venues in real time to route each order to the source offering the best available execution.

Also: SOR

Spread

The difference between the bid and ask price of an asset, representing a core component of trading cost.

Stop Hunting

The alleged practice of a dealing desk broker deliberately triggering client stop-loss orders by temporarily manipulating prices, profiting from the resulting forced liquidations.

Straight-Through Processing (STP)

A fully automated order processing method where trades pass from initiation to settlement without manual intervention.

Also: STP

Swap

An overnight financing charge or credit applied to positions held past the daily rollover time, based on the interest rate differential between the two currencies in a pair.

Also: Rollover, Overnight Rate

Tick

A single price change in a financial instrument, representing the smallest possible price movement recorded by the exchange or trading platform.

Time to Fill

The total elapsed time from order submission to complete execution, encompassing network latency, broker processing, LP response, and any routing delays.

Also: Execution Speed

Trading Pulse

A public metrics dashboard concept displaying real-time and aggregated trading data, such as volume, execution speed, and fill statistics.

Transaction Cost Analysis (TCA)

A post-trade analytical process that measures total execution costs including spread, slippage, market impact, and timing costs to evaluate execution quality.

Also: TCA

Transparency

The degree to which a broker publicly discloses its execution model, routing logic, pricing methodology, and performance metrics.

TwinCross FX

A proprietary FX execution engine by NDD that provides cross-connected liquidity matching across multiple venues for optimal price discovery.

Volume-Weighted Average Price (VWAP)

A benchmark that calculates the average price of an asset weighted by traded volume over a specific period.

Also: VWAP

Waterfall Routing

A sequential order routing strategy that sends an order to the top-ranked LP first, and if rejected, cascades to the next LP in priority until filled or all options are exhausted.