FX Aggregator known as foreign exchange aggregator is a simple system for aggregating Forex liquidity from different liquidity providers. Two major functions of these aggregators are
- Giving a trader the opportunity to compare prices of different LPs(banks on the global market, ECN providers like FXall, Currenex, Hotspot FX, etc.);
- Helping trader to have a consolidated view across the latest movements of the market.
Through these aggregators traders get a chance to trade with numerous participants with a single trading terminal or just one API. Other than that, some aggregators even offer order sweeping- the order placed by trader gets divided into parts and each part is delivered to the counter party based on the time, price and attributes of the quote. The system may also send the whole order to one liquidity provider which is chosen by FX aggregator software with the help of its algorithms.
FX Aggregator Technology
Talking about FX aggregator solutions should mention that there are many companies who have developed flexible and fast software for improving trading liquidity. One of such products is Soft-FX Aggregator. As mentioned by Max Faust in the interview with Forex Magnates“The rapidly changing FX market demands brokers to provide reliable service and quality liquidity for their clients, whilst the broker also has to pay close attention to the costs of liquidity aggregation. Due to this reason, new generation toolsets have been created in order to ensure profit optimization via technology innovations, that let brokers concentrate on their core business activity – bringing in and managing new clients”.
Benefits of using FX Aggregators
Aggregators are definitely one of the best solutions for the aggregation of liquidity from unlimited internal and external sources in just one view. An aggregator even supports different combination of order types, currencies and tiered pricing too. In fact, with aggregators organizations can maintain their liquidity so that they can use different combinations for better execution and perfect smart order routing using specific set of rules which are defined by the organization. Best thing is that the software uses Market Depth Data from different LPs to decrease spreads and increase liquidity.
Along with that, FX aggregators are very important for those organizations who want to create their own liquidity network.