🏦 Brokers·advanced

B-Book

A broker model where client trades are kept in-house (not routed to the market) — the broker takes the other side and profits from losses.

B-book is a broker's internal order handling model where client trades are kept on the broker's books rather than being routed to external liquidity providers. The broker takes the opposite side of every B-book trade — if the client loses, the broker wins, and vice versa. B-book is the default model for market maker brokers. Brokers use B-book because it's profitable. Most retail forex traders lose money over time, so holding the other side of their trades is a positive expectation business for the broker. Large, profitable clients get moved to A-book (where their trades are routed to LPs) to protect the broker from big losers. Losing clients stay in B-book. B-book isn't automatically unethical, but it creates a conflict of interest. The broker profits when you lose, which incentivizes bad behavior like slippage, re-quotes, and "platform issues" during volatile moves. Regulated brokers are less likely to engage in this, but the structural incentive still exists.

Real trade example

Forex.com and FXCM have both been fined by US regulators for B-book practices that disadvantaged profitable clients. The fines ran into tens of millions of dollars and served as warning shots to the industry.

Related terms

A-Book

advanced

A broker model where client trades are routed directly to external liquidity providers — the broker just passes through orders for commission.

Market Maker Broker

intermediate

A broker that takes the other side of your trades — they profit when you lose, creating an inherent conflict of interest.

ECN Broker

intermediate

A broker that routes orders directly to a network of liquidity providers without taking the other side — no conflict of interest.

STP Broker

intermediate

A broker that routes orders straight through to liquidity providers without dealer intervention — similar to ECN but less transparent.

Broker

beginner

The company that gives you access to the forex market — the middleman between you and the currency you want to trade.

Broker Regulation

beginner

The government or industry body that oversees a broker and enforces rules on capital requirements, disclosures, and client protection.

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