Liquidity glossary for brokers: The terms you should know

The key terms for evaluating a liquidity provider, clearly defined, with how each applies at Match-Prime

The broker's liquidity dictionary: 50 terms you should know

These are the terms that come up when a broker chooses a liquidity provider, connects to one and manages the risk it passes on: pricing, execution, risk and conduct, connectivity, regulation and 24/7 trading.

Each entry gives a plain definition first. The line below it says how the term applies at Match-Prime and links to the page, report or document that shows it, so you can check it yourself.

Definitions describe general market practice. Lines about Match-Prime describe our own terms and published data, which depend on the instrument, client classification and agreed account configuration.

A

A-book

A broker A-books a trade when it passes the client's order on to a liquidity provider, so the market risk leaves the broker's book. The broker earns a markup on the spread or a commission, whether the client wins or loses.

At Match-PrimeBrokers A-book to Match-Prime through FIX or a bridge, and can see each hedge account's balance, equity and margin in real time over FIX.

Aggregation

Aggregation combines prices from several liquidity sources into one feed, so each order is priced against the best available bid and offer across all of them. It also lets one source drop out without the feed stopping.

At Match-PrimeMatch-Trader PRO combines multiple upstream sources into one composite feed and reroutes order flow automatically when a source degrades or stops quoting.

Read more: Technology

All-in cost per million

The total cost of executing $1 million of notional: commission on both sides, the average spread at your trade size, slippage, rejected orders, and the extra spread paid in volatile sessions. For scale, 0.1 pip of EURUSD spread is worth about $10 per $1 million, the same as a $5 commission per side across a round turn.

At Match-PrimeMatch-Prime publishes average spreads from named stress events, so the event-day part of this cost can be checked against a date.

Read more: Execution data

B

B-book

A broker B-books a trade when it keeps the other side of the client's position on its own book. The broker then carries the market risk, manages it with limits, and often hedges the residual exposure with a liquidity provider.

At Match-PrimeMatch-Prime's article on responsible B-booking covers the capital, limits and hybrid set-ups that keep a B-book within a broker's means.

Best execution

Under MiFID II, a firm executing client orders must take all sufficient steps to obtain the best possible result, weighing price, costs, speed, likelihood of execution and settlement, size and the nature of the order. The duty applies to retail and professional clients and is disapplied for eligible counterparties.

At Match-PrimeMatch-Prime's Best Interest and Order Execution Policy sets out how it applies these factors for professional clients, including ex-ante and ex-post checks on slippage symmetry and execution speed.

Read more: Legal documents

Bridge

A bridge is the software that connects a broker's trading platform, such as MT4 or MT5, to one or more liquidity providers. It routes orders out, carries prices and fills back, and applies the broker's routing rules and markups.

At Match-PrimeMatch-Prime connects through the bridges brokers already run, and provides an MT4/MT5 bridge at no additional cost.

C

CFD (contract for difference)

A contract for difference is a derivative that allows you to speculate on the price movement of an underlying asset, without holding ownership. Brokers use CFDs to offer FX, metals, indices, energies, shares and crypto from one account.

At Match-PrimeMatch-Prime provides CFD liquidity on 2,000+ instruments across eight asset classes through a single counterparty.

Read more: Liquidity offer

CFDs on perpetuals

A CFD on a perpetual has no expiry, so it needs no monthly rollover, and it is quoted continuously, including weekends and market holidays. The cost of holding it is charged as funding at set cycles.

At Match-PrimeMatch-Prime's CFDs on Perpetuals cover gold, silver, WTI, US100 and US500, priced from live primary-exchange quotes while venues are open and by internal price discovery anchored to the last external close when they shut.

Coordinated account activity

Trading spread across several linked accounts so that, taken together, the positions produce a result the agreed terms do not allow. Each account can look ordinary on its own, which is what makes the pattern hard to see.

At Match-PrimeCoordinated account activity is one of the twenty risk and conduct patterns HawkEye RMS monitors during the live session.

Credit line

A credit line lets a broker hold positions with its liquidity provider beyond the margin it has posted, within an agreed limit. It frees capital, and the conditions under which the provider can reduce it matter as much as its size.

At Match-PrimeMTG Liquidity Ltd is authorised to grant credit connected with transactions, and brokers can see their granted credit facility over FIX alongside balance and margin.

CySEC

The Cyprus Securities and Exchange Commission supervises investment firms in Cyprus under the EU's MiFID II framework. A firm it authorises is a Cyprus Investment Firm (CIF) and can serve clients in other EEA states through the MiFID passport once it has notified CySEC.

At Match-PrimeMatch-Prime is the trading name of MTG Liquidity Ltd, a Class 2 CIF authorised by CySEC under licence 390/20 on 12 October 2020.

Read more: Legal documents

D

Dealing desk

The team that manages a firm's execution and market risk: it sets limits and pricing, monitors exposure and defines the hedging strategy.

At Match-PrimeHawkEye RMS acts first on flow that breaches the agreed terms, and the dealing team reviews each action afterwards. Every action is logged, reversible and open to challenge by the client.

Depth of market

Depth of market shows the volume available at each price level beyond the best bid and offer. It tells a broker how much can be filled, and at what spread, before the price moves.

At Match-PrimeMatch-Prime streams 10 levels of market depth in real time, including over FIX.

Read more: Liquidity offer

E

Eligible counterparty

The MiFID II client category for the most sophisticated market participants, such as investment firms, credit institutions and insurers. Most conduct-of-business rules, including best execution, are disapplied for eligible counterparties.

At Match-PrimeMatch-Prime serves professional clients and eligible counterparties only, and does not accept retail clients.

Read more: Legal documents

EMIR reporting

EMIR is a regulation that requires counterparties to an OTC derivative, CFDs included, to report details of each trade to a registered trade repository within a strict deadline (T+1). Both buyer and seller must report the exact same trade using a matching id called Unique Transaction Identifier (UTI)

At Match-PrimeMatch-Prime can take over EMIR reporting on a broker's behalf, including UTI matching and the regulatory submissions.

Read more: Liquidity offer

F

Failover

Failover is the automatic switch to an alternative pricing or execution source when the current one degrades or stops quoting. It decides whether a broker keeps quoting its own clients through a venue outage.

At Match-PrimeDuring the CME outage on 28 November 2025, Match-Prime's routing moved flow to alternative pricing sources without manual intervention.

FIFO (netting)

On a netting hedge account, an order in the opposite direction closes an existing position instead of opening a new one, and FIFO (first in, first out) closes the oldest position first. Netting saves margin and swaps, but it makes a broker's A-book profit harder to reconcile trade by trade.

At Match-PrimeMatch-Prime offers a non-FIFO hedge account, built with Match-Trade Technologies, that matches each client trade with its own order on the hedge account, for brokers on MT5, Match-Trader and other FIX-compliant platforms.

Fill ratio

The share of submitted orders a provider fills over a stated period. Two fill ratios are only comparable when the window, the order sizes and the treatment of partial fills are the same.

At Match-PrimeMatch-Prime publishes fill ratios from named market-stress events, with the date and instrument, on its execution-data page.

Read more: Execution data

FIX API

FIX (Financial Information eXchange) is the standard messaging protocol institutions use to stream prices, send orders and receive executions. Version 4.4 is the most widely used, and providers differ in the custom messages they add.

At Match-PrimeMatch-Prime's FIX 4.4 connection also returns hedge-account data in real time: balance, equity, used margin, free margin, granted credit and profit.

FX Global Code

A set of principles for good practice in the wholesale FX market, maintained by the Global Foreign Exchange Committee. Firms sign a Statement of Commitment to show they align their FX activities with it; it covers areas including last look, markup disclosure and order handling.

At Match-PrimeMTG Liquidity Ltd signed a Statement of Commitment to the FX Global Code on 19 January 2026, published on Match-Prime's legal documents page.

Read more: Legal documents

Five named days, measured.

Average spreads, fill ratios and quote uptime from five market-stress events between September 2025 and July 2026, each with its date and instrument.

See execution data

H

Hedging

Hedging offsets exposure by taking an opposite position elsewhere. A broker hedges client exposure with its liquidity provider, and the provider in turn hedges the part of its own book it does not want to hold.

At Match-PrimeMatch-Prime keeps hedging separate from execution: a broker's flow is filled in full against Match-Prime on the terms quoted, and HawkEye hedges Match-Prime's own residual risk without changing the price, speed or likelihood of the broker's fill.

Hybrid model

A hybrid broker A-books some flow and B-books the rest, splitting it by account group, instrument or trade size according to its own risk policy. The split is where most of a broker's risk decisions sit.

At Match-PrimeMatch-Prime's A-book and B-book guide sets out the three common ways to split flow: by client, by trade, and by trade size.

I

Internal price discovery

The method a provider uses to price an instrument while its reference venue is closed, such as gold or index CFDs at the weekend. The price is built from other sources and anchored to the last external close, with safeguards against erratic prints.

At Match-PrimeMatch-Prime's version uses a decay function that smooths erratic spikes and a cage that holds the mark price within a defined band around the external close.

L

Last look

A window in which a liquidity provider, after receiving a trade request at its quoted price, checks the request before accepting or rejecting it. The FX Global Code (Principle 17) asks providers that use last look to disclose how it works, including hold times and how price changes in either direction affect the decision.

At Match-PrimeMatch-Prime has a no-last-look policy: it does not hold a broker’s order for a further price check before accepting or rejecting it.

Read more: Legal documents

Latency arbitrage

Trading on the gap between a fast price feed and a slower quote, so orders hit prices that have already moved elsewhere. Variants use one account, or two linked accounts whose offsetting positions hide the pattern.

At Match-PrimeHawkEye RMS monitors latency arbitrage as one of twenty risk and conduct patterns and, where three independent checks agree, restricts the breaching activity for that trader alone.

Leverage

Leverage is the ratio of position size to the margin posted: 5x leverage means a 20% margin requirement. EU rules cap CFD leverage for retail clients; for professional clients and eligible counterparties it is set by the provider's terms.

At Match-PrimeMatch-Prime's 24/7 CFDs launched at 5x leverage (20% margin), the same at weekends as on weekdays.

Liquidity provider (LP)

A firm that quotes buy and sell prices to brokers and takes the other side of their trades, so the broker can execute and hedge client flow. LPs range from banks to non-bank market makers and Prime of Prime providers.

At Match-PrimeMatch-Prime is a CySEC-regulated liquidity provider for FX and CFD brokers, operating since 2020, with offices in Nicosia, Limassol and Dubai.

Liquidity stream

The prices and conditions a provider sends to one client: which instruments, which spreads, how much depth and which execution settings. Two brokers at the same provider can receive different streams.

At Match-PrimeMatch-Prime configures each broker's stream, including spreads, depth-of-book and symbol settings, around the broker's business model, flow and risk profile.

Read more: Liquidity offer

M

Margin requirement

The collateral a broker must post to open and hold a position, set as a percentage of its notional value. When equity falls below the requirement, the provider can call for more margin or close positions.

At Match-PrimeBrokers can see used and free margin on each Match-Prime hedge account in real time over FIX.

Market stress event

A session in which volatility, price gaps or a venue outage test a provider's pricing, depth and limits, such as a payrolls release, a central bank decision or an exchange failure. Brokers use these days to test a provider's claims, because a monthly average smooths them out.

At Match-PrimeMatch-Prime publishes execution reports from five named events between September 2025 and July 2026, including the 28 November 2025 CME outage and the 29 July 2026 Fed decision.

Read more: Execution data

Markouts

A markout measures how the market price moves at set intervals after a trade, for example 1, 10 and 60 seconds later. Markouts that move consistently in one account's favour suggest its flow is trading on information or latency the quoted price has not yet absorbed.

At Match-PrimeMarkouts are one of the everyday tools Match-Prime's dealers and HawkEye's AI agent both use to read flow.

Markup

The amount a broker adds to its liquidity provider's price, in the spread, as a commission, or both. A markup set against a calm-market spread can disappear when the provider's spread widens in a volatile session.

At Match-PrimeMatch-Prime's client dashboard shows spreads and execution data in real time, so a broker can see the base its markup sits on.

Read more: Technology

MiFID II

The EU framework for investment services, covering client categorisation, best execution, product governance and transaction reporting. CFDs are financial instruments under MiFID II.

At Match-PrimeMatch-Prime's 24/7 CFDs on Perpetuals are delivered through its CySEC-regulated entity and classified as standard CFDs under MiFID II.

N

NOP limit (net open position limit)

The largest net position a broker can hold with a liquidity provider in one instrument or group of instruments. Once the limit is reached, the broker has to keep any further client exposure on its own book, which is why a limit cut during an event matters.

At Match-PrimeMatch-Prime sets NOP limits per account configuration. Its 24/7 CFDs launched with a flexible NOP limit, applied across all sessions and adjustable in elevated volatility or fragmented liquidity.

O

Own funds (CET1)

A firm's regulatory capital. Common Equity Tier 1 (CET1) is its highest-quality part: paid-up shares, retained earnings and reserves, with no debt instruments. EU investment firms must hold own funds above a requirement set under the Investment Firms Regulation (IFR).

At Match-PrimeAt the end of 2025, Match-Prime's own funds were held entirely as CET1 and stood at 527% of its requirement, according to its 2025 Pillar III report.

Read more: Legal documents

P

Pillar III disclosure

The annual public report in which an EU investment firm discloses its own funds, capital requirements, risk management and remuneration. It is one of the few public ways to check a provider's capital position before posting margin with it.

At Match-PrimeMatch-Prime's Pillar III reports for every year since 2020 are on its legal documents page.

Read more: Legal documents

Prime of Prime (PoP)

A firm that holds relationships with prime brokers and banks and gives brokers access to that liquidity and credit through one account. It lets a broker trade with prime-brokered liquidity without meeting the prime broker's own capital and volume requirements.

At Match-PrimeMatch-Prime is a Prime of Prime provider for regulated FX and CFD brokers, authorised by CySEC (licence 390/20), with 2,000+ instruments through a single counterparty.

Read more: Liquidity offer

Principal

A firm acts as principal when it takes the other side of its client's trade and deals on its own account. An agent passes the order on to a third party instead. A principal carries the market risk until it hedges.

At Match-PrimeMatch-Prime acts as principal: a broker's flow is executed in full against Match-Prime on the terms quoted, and Match-Prime hedges its own book separately.

Professional client

A MiFID II client category for firms and individuals presumed to understand the risks they take. Some qualify per se, such as investment firms and large undertakings; others can ask to be treated as professional if they meet two of three tests on trading frequency, portfolio size and professional experience.

At Match-PrimeMatch-Prime assesses each client under its Client Categorisation Policy and accepts professional clients and eligible counterparties only.

Read more: Legal documents

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Q

Quote uptime

The share of a period during which a provider streams executable prices. It shows whether a broker could still quote its own clients during a venue outage or a fast market.

At Match-PrimeMatch-Prime reported 100% quote uptime through the 28 November 2025 CME outage.

R

Re-quote

A re-quote happens when a provider cannot fill an order at the requested price and returns a new price for the client to accept or decline. It applies to instant execution; market and pending orders fill at the next available price.

At Match-PrimeUnder its order execution policy, Match-Prime re-quotes only instant orders, when the requested price is unavailable, and it does not re-quote on the basis of whether a position is hedged.

Read more: Legal documents

Revenue per million (RPM)

A broker's revenue for every $1 million of notional its clients trade, across spreads, commissions and B-book results. It is the standard way to compare profitability across instruments and periods, because a lot has a different dollar value on each instrument.

At Match-PrimeMatch-Prime's guide to RPM shows how to calculate it, including the data errors that distort it, such as test accounts on live servers and double-counted PAMM volumes.

Risk management system (RMS)

Software that monitors trading flow and exposure in real time and applies limits, alerts or restrictions. At a liquidity provider it also decides what the provider hedges.

At Match-PrimeHawkEye RMS monitors flow against twenty risk and conduct patterns. A restriction lands only after three independent checks agree, and it applies only to the trader concerned.

Read more: Technology

S

Segregated client money

Client funds a firm holds in accounts separate from its own money, aiming to safeguard clients rights if the firm becomes insolvent. By contrast, under a title transfer arrangement, ownership of the funds passes to the firm under contractual terms.

At Match-PrimeMatch-Prime reports the client money it holds in segregated accounts in its annual Pillar III disclosure.

Read more: Legal documents

Slippage

The difference between the price requested and the price filled. Positive slippage fills at a better price and negative slippage at a worse one. Slippage is asymmetric when a provider passes on moves against the client but keeps the ones in the client's favour.

At Match-PrimeMatch-Prime states that it does not apply asymmetric slippage, and its order execution policy includes ex-ante and ex-post checks on slippage symmetry.

Spread

The difference between the bid and the ask price. Spreads quoted “from” a particular value represent the minimum spread available under certain market conditions, not the spread clients will always receive. Average spreads over a specified period can provide a more representative indication of typical trading costs.

At Match-PrimeMatch-Prime publishes average spreads from named events, with the date and instrument, on its execution-data page.

Read more: Execution data

Swap (rollover)

The overnight financing charge or credit on a position held past the daily cut-off, based on the interest-rate differential between the two sides of the pair. For gold, the rate on the metal side is the gold lease rate.

At Match-PrimeMatch-Prime's analysis of early 2025 tracks how the one-month gold lease rate rose from 0.08% to a peak of 5%, pushing long XAU/USD swap points towards zero and, in some cases, positive.

T

Top of the book

Top of the book is the best bid and the best offer available for an instrument at a given moment: the highest price a buyer will pay and the lowest price a seller will accept. The spread between them is the tightest a broker can trade at, and the volume behind it shows how much can be filled before the price moves.

At Match-PrimeMatch-Trader PRO builds the top of book from multiple upstream sources, quoting the best available bid and offer across all of them, with 10 levels of depth streamed behind it.

Read more: Technology

W

Weekend trading (24/7 CFDs)

CFD trading that continues through weekends, overnight sessions and market holidays, while the underlying venue is shut. Spreads usually widen in these hours because less liquidity sits at the top of the book.

At Match-PrimeMatch-Prime's 24/7 CFDs on gold, silver, WTI, US100 and US500 carry a ".247" suffix and run on Match-Trader, MT4, MT5, cTrader and FIX API, through the same onboarding as its weekday range.

X

XAUUSD

The symbol for gold quoted in US dollars per troy ounce. Gold is the largest single instrument in many broker books: metals made up more than 60% of global broker CFD volume in the first half of 2025, about 80% of it gold (Finance Magnates Intelligence).

At Match-PrimeMatch-Prime's published execution data covers XAUUSD in four of its five named stress events.

Read more: Execution data