Liquidity providers that work in an STP model, send all orders to their Prime Brokers. Most them use “Last Look” functionality, which is a check logic done before execution to examine if requested price is within the price tolerance of the Prime Broker. Unless the execution conditions are met, the order will be rejected by the liquidity provider. This means that streamed prices are only indicative and price execution is not guaranteed. Additionally, Prime Brokers can adjust parameters of execution like the delay of execution and the price tolerance on a per client basis. As a result, Prime Brokers can negatively affect orders of your profitable client. This often results in poor client experience and may harm broker’s reputation.
FX-EDGE ECN Model
Contrary to this model, FX-EDGE’s liquidity is based on matching engine technology, same as used on stock exchanges. This robust solution guarantees that each price in our matching engine is tradable (executable) not just indicative. In the FX-EDGE liquidity offering, prime brokers or liquidity providers don’t have the ability to examine requested price before execution through their price tolerance algorithms. No last look execution is the most transparent and the fairest liquidity model available in the FX market.