Liquidity Provider
Brokers & RegulationA bank or institution that continuously quotes prices, supplying the depth brokers rely on to fill client orders.
A liquidity provider is a bank, financial institution, or specialized firm that continuously quotes buy and sell prices for an instrument, supplying the depth that lets brokers fill client orders. Retail brokers typically source liquidity from multiple providers (or from a Prime of Prime aggregator) to get the tightest possible spread and the best available fill.
The number and quality of a broker's liquidity providers directly affects its spreads, execution speed, and reliability during high-volatility events, even though it's largely invisible to the end client.