How it works
In forex, the top LPs are tier-1 banks (JPMorgan, Citi, UBS, Deutsche Bank) plus non-bank LPs (Citadel Securities, XTX, Jump). They quote prices into ECNs and prime broker pipes. Your broker aggregates these quotes and shows you the best available bid and ask. When you trade, the order is filled against whichever LP is on the inside of the book at that millisecond.
Example
You buy 1 standard lot of EUR/USD at 1.0856. Behind the scenes: your broker’s aggregation engine sees 5 LPs quoting 1.0856 on the offer side. Citi is showing 3 million at that price, XTX 2 million, the rest smaller. Your 100,000 euro order takes 100,000 from Citi’s quote. You see one fill. The mechanics behind it are invisible.
What LPs decide for you
- Spread: more LPs competing = tighter spread. EUR/USD has dozens of LPs, hence 0.2 to 0.6 pip spread.
- Depth: how big an order can fill near the top of book. Majors carry tens of millions per pip; exotics carry hundreds of thousands.
- Stability: good LPs honour quotes; weak LPs pull at the moment you click (last-look rejection).
- Asset coverage: some LPs only quote majors, others cover crosses, exotics, and metals.
Why it matters
The quality of LP pool is what separates good brokers from bad ones. A broker with a small or weak LP pool will show wider spreads, more rejections, and bigger slippage spikes on news. When evaluating any broker, the LP list and the prime broker setup are the single most predictive signals of real execution quality.
