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Adapt and Scale Your Brokerage: How to up Your Liquidity Management Game

How do you scale up your brokerage?

Diversifying your liquidity management is one of many ways you can do so. But why?

Retail traders have started to get a wondering eye and are now looking to trade new and exciting asset classes such as cryptocurrencies.  

That’s where you come in. 

In order to stay competitive, diversification is necessary, as it will enable you to gain more clients, take more deposits and see increased trading activity.

Traders want to be able to trade multi-asset markets easily, using only one solution - one broker. This is important to consider, as if they can’t get access to the asset classes they want through your business, then they will most probably be on the lookout for another provider that meets their needs.

So, how does becoming a multi-asset liquidity provider help grow your brokerage?

As mentioned in Tom’s previous ‘Adapt and Scale’ blog, giving traders the capability to invest in multiple asset classes is a great way to diversify and grow your brokerage and therefore you need to be able to consume liquidity from multiple providers. Increasing the number of liquidity providers not only helps you differentiate but also gives you a much tighter spread allowing you to aggregate feeds to obtain a Best Bid or Offer. You will also benefit from better pricing across the larger asset class ranges – As Tom always says, LPs “are not all good at everything”. 

How many Liquidity Providers should you select? 

There isn’t a definitive answer as it depends massively on your strategy. However, the most important consideration is for you to match your liquidity providers to the specific requirements of your brokerage – e.g. selecting specialist liquidity providers for each individual market (FX, cryptocurrencies and CFDs) as for example some liquidity providers may have better prices on metals, whereas others could focus on major asset classes or exotics.

Annoyingly for smaller brokers, gaining this multi-asset liquidity is harder to do because of the big multi-asset liquidity providers who have been much slower to offer FIX connectivity to their full range of markets - which is a far cry away from FX liquidity providers who fall over themselves to take a broker’s trades.

But fear not!

Brokers no longer need to rely on liquidity providers connectivity to distribute liquidity globally. There are reliable technology solutions on the market for you to take advantage of who already have partnerships with a vast range of liquidity providers that offer access to high quality, competitively priced liquidity across multiple asset classes.

This is where we can help.

Gold-i’s Matrix Net is used by leading liquidity providers and prime of prime brokers to distribute liquidity globally. The multi-asset platform enables you to aggregate multiple pools of liquidity, mark up the spreads, and stream your own liquidity to a trading platform or other financial entity, with an easy and efficient system configuration.

Key benefits include:

  • Aggregate multi-asset liquidity feeds including FX, CFDs, and Cryptocurrencies
  • Use Matrix Insights to analyse order routing and report execution statistics, such as slippage, latency, fill quantity
  • Offer your own liquidity to clients and leverage Gold-i’s Matrix NETwork

Find out more about our Gold-i Matrix Net and other liquidity management solutions here.

But don’t just take our word for it, get in touch today to receive a free demo of our Gold-i Matrix Net or please feel free to contact us to gain further expert advice on how to grow your FX brokerage.