ConceptBeginner
Liquidity Provider
syn. LP
A financial institution (bank, prime broker, or ECN) that supplies buy and sell quotes, enabling brokers to fill client orders.
Last updated: February 1, 2026
1
An LP (bank, prime broker, non-bank market maker, or ECN) connects to the broker via FIX protocol.
2
The LP streams continuous two-way quotes (bid and ask) with associated depth.
3
When the broker routes a client order to an LP, the LP decides whether to fill, reject, or partially fill.
4
LPs compete on pricing, speed, and fill quality to attract more order flow.
5
The broker monitors LP performance and may adjust routing weights based on execution quality.