Liquidity provider

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    Liquidity providerliquidity provider connects many brokers and traders together, increasing the liquidity of the joint market. A higher liquidity is desirable for everyone, as it drives down the spread and thus the cost of trading.

    Especially straight-through processing (STP) brokers will often try to connect themselves to many large liquidity providers to improve their own offered liquidity and prices.

    Liquidity providers are often large banks and other financial institutions. In forex trading, the world’s largest liquidity provider is the Deutsche Bank, also known as a leading retail and investment bank.