The Difference Between A Book and B Book Brokers
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A, B and C Models for Retail Brokers. What is A book vs B book in forex trading? How do brokers classify clients based on risk and on which criteria are they added in the A-book or B-book? Are you a B book client? What are A-book and B-book models of FX brokers? Is B-book execution really that bad?

The “A-book” references trades that a broker receives and are channeled on to the inter-bank market with the broker clipping a ticket. The other option is the ‘B-book’ which is made up of trades that a broker hasn’t passed on to the market but taken on themselves.

The Difference Between A Book and B Book Brokers

Let’s discuss A-book B-book and Hybrid Models. How do brokers make money and what is each model about?

A Model
– profit from the spread only model.
– pass trades straight through to a bank via an ECN and they will make money on the difference between the price that they are dealing at and the price that they’re giving it to you at.
– money made on retail wholesale model.

B Model
– hedge; because brokers get so much clients flow, brokers can work out where they are over-exposed and hedge risk where appropriate.
– trade against clients
– flexible
– more lucrative
– less desirable

C Model
– Anything else to extract value.
– Say 70% of the ‘B Model’ and 20% of the ‘A Model’..etc

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