術語表 · 什麼是外匯？Liquidity provider
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Liquidity providers are banks and firms that quote buy and sell prices to a broker. They stand ready to trade at those prices. A broker combines their quotes into the bid and ask you see, sometimes adding its own markup to the spread.
When you see a EUR/USD quote on your platform, the broker did not make it up. It is built from prices streamed by liquidity providers, often shortened to LPs.
The what is forex lesson places them in the wider market.
What a liquidity provider does
An LP quotes a bid and an ask for a set volume and will trade at those prices. Large banks are the classic LPs, and non-bank trading firms now fill the same role.
A broker usually connects to several LPs at once and shows you the best bid and the best ask among them, sometimes with a markup. All of this happens in the over-the-counter market.
Depending on its model, a broker may pass your trade on to an LP or take the other side itself. Either way, your contract is with the broker.
A worked example
Prices are illustrative. LP 1 quotes EUR/USD at 1.10000 bid and 1.10003 ask. LP 2 quotes 1.10001 bid and 1.10004 ask.
The best bid is the higher one, 1.10001 from LP 2. The best ask is the lower one, 1.10003 from LP 1. The combined spread is 0.00002, or 0.2 pip.
A raw spread account shows something close to that 0.2 pip and charges a commission per lot. A standard account might add a markup and show, say, 1.0 pip with no commission.
When several LPs pull back at once, at the daily rollover or around big news, liquidity thins and spreads widen.
常見問題
Do retail traders deal with liquidity providers directly?
No. LPs work with brokers, banks and other institutions, and a retail trader reaches their prices through a broker.
Is a liquidity provider the same as a market maker?
Often. A market maker quotes both a bid and an ask and trades at them; streaming those prices to brokers makes it a liquidity provider.
本章節其他術語
ForexForex (foreign exchange, or FX) is the global market for trading currencies. Every price is quoted as a pair, such as EUR/USD, and trading happens over the counter between dealers rather than on one central exchange.
Currency pairA currency pair is the price of one currency in terms of another, such as EUR/USD. The first is the base currency, the second is the quote currency, and the price is how much of the quote currency buys one unit of the base.
Base currencyThe base currency is the first currency in a currency pair, the one whose price is quoted. In EUR/USD it is the euro, so a price of 1.10000 means one euro costs 1.10000 US dollars. Buying the pair means buying the base currency.
Quote currencyThe quote currency is the second currency in a pair, the one the price is counted in. In EUR/USD it is the US dollar, so 1.10000 means one euro costs 1.10000 dollars. Pip value and profit on the pair are worked out in the quote currency first.
Exchange rateAn exchange rate is the price of one currency in terms of another. EUR/USD at 1.10000 means one euro exchanges for 1.10000 US dollars. On a trading platform every rate comes as two prices: a bid you can sell at and a higher ask you can buy at.
Long and short positionsLong and short positions are the two directions a trade can take. Going long means buying a currency pair to profit if its price rises. Going short means selling it to profit if the price falls. In forex you can sell a pair as easily as you buy it.