Do liquidity providers charge commission in forex? This is a common question among traders. Liquidity providers (LPs) are financial institutions or non-bank entities that supply the buy and sell quotes brokers pass to clients. Examples include Tier-1 banks, non-bank market makers, and Electronic Communication Networks (ECNs). These LPs play a crucial role in the forex market, ensuring that trades are filled quickly and efficiently.
Tier-1 banks like JPMorgan or Citi are top-level liquidity sources. Non-bank LPs are private institutions providing competitive quotes. ECNs, on the other hand, are electronic systems that match buy and sell orders directly, often giving traders access to the tightest spreads.
In certain ECN/STP models, LPs may charge a commission based on the volume traded — often per million units. In other cases, the cost is built directly into the spread. This means that instead of seeing a separate commission, traders experience slightly wider bid/ask prices.
Some LPs prefer commission-based pricing for transparency, while others choose spread-based pricing for simplicity. Understanding which model your broker uses is essential for accurate cost comparisons.
In most cases, traders do not pay LP commissions directly. Instead, the broker handles these costs. The broker may pass them on either as a visible commission or as a small markup in the spread. This is why transparent pricing platforms are vital — they allow traders to see real market depth and understand the cost structure.
At FIXIO, we connect directly to Tier-1 LPs and ECNs to ensure traders get competitive, raw spreads. We use a fixed commission per lot, clearly stated upfront. There are no hidden LP markups, so traders always see genuine market pricing. Our cTrader platform and FIX API access let traders view market depth and trade with complete confidence.
A low raw spread plus commission can be cheaper than a “no commission” account with a wider spread. For example, a raw spread of 0.1 pip plus $3 commission can cost less than a 1.2 pip spread with no commission. This difference matters most for high-volume traders, where small cost savings add up significantly over time.
While liquidity providers may charge commission, the key is finding a broker that passes on the best possible pricing. FIXIO’s direct LP connections, transparent costs, and advanced trading technology mean traders know exactly what they are paying for — and why it is competitive.
Do liquidity providers charge commission in forex? Learn how FIXIO ensures transparent pricing with direct Tier-1 LP connections.
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