LP vs. Brokers: Who Really Controls Forex Spreads in 2025

LP vs. Brokers: Who Really Sets Spreads?

According to the Bank for International Settlements and Refinitiv (September 2025), the top 10 LPs (UBS, JP Morgan, Citi, Deutsche Bank, etc.) control up to 70% of the global FX volume.
They generate quotes through centralized order books (CLOBs), influencing spreads and liquidity. Brokers act as intermediaries, aggregating flows. Choosing a broker with multiple CLOBs reduces the risk of manipulation by 15–20%.

LPs as Forex "Gods"

Forex is positioned as a decentralized market. But in reality, at its core are large banks and technology platforms that manage the supply of liquidity.

UBS, Citi, JP Morgan, Deutsche Bank, XTX Markets are the main players.

They control over 6 trillion USD in daily turnover .

Uses Central Limit Order Books (CLOB) for transparency and algorithmic spread optimization.

Brokers are merely the interface through which retail traders gain access to these flows.

Importance for traders

It is important for a trader to understand that a broker does not “create” liquidity , but merely connects to the LP.

Choosing a broker with 5+ LP reduces the risk of manipulation by 20% (according to FXCM Research).

Multi-LP aggregators allow you to get tighter spreads on majors (EUR/USD, USD/JPY).

Hidden dependence : Brokers without direct access to large LPs inflate commissions or widen spreads manually.

LP vs. Brokers: Who Really Controls Forex Spreads in 2025

Cases of 2025

UBS and Deutsche Bank have integrated AI modules for dynamic pricing: EUR/USD spreads have fallen to 0.1 pips in low volatility conditions .

B2Broker connected retail to hybrid LP streams through Prime of Prime, reducing slippage during the Asian session by 12%.

CMC Markets came under fire from the FCA in August 2025 for "repainting" quotes when there were not enough LPs in the pool.

LP vs. Brokers: hierarchy or symbiosis?

Hierarchy: LPs dictate prices, brokers only broadcast.
Symbiosis: brokers create competition by choosing different LPs.

Quote from Refinitiv analyst Laura Kelly:

"Brokers are a window dressing, but the real power lies with the LP. Whoever controls the liquidity controls the market."

Technology: What Drives the Market

CLOB (central limit order books) – standardization of quotes as on CME.

AI Liquidity Hubs – Machine learning for predicting demand surges.

Dark pools are hidden LP channels where retail traders can execute orders anonymously.

Forecast 2025–2027

According to TradingEconomics (September 2025):

by 2027, the share of top 10 drugs will grow to 75%;
AI models will predict liquidity seconds before news, reducing slippage by 20-25%;
Brokers will be forced to connect at least 10 LPs to remain competitive.
In 2025, spreads are more than just numbers on a screen; they're a tool of power. Liquidity providers control the market, while brokers are merely conduits. For traders, the key strategy is to choose brokers with a wide pool of liquidity providers and verify their transparency.


By Miles Harrington 
October 13, 2025

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