What is B-Book Execution?
B-Book
Forex Trading Glossary
Quick Answer: B-book execution keeps orders inside the broker, meaning the broker becomes the counterparty and profits when clients lose.
What is B-Book Execution?
B-book execution is a dealing-desk model where the broker internalizes client trades rather than routing them to external liquidity. The broker effectively becomes the counterparty, profiting when traders lose and carrying risk when traders win.
Key Characteristics
- Internal matching: Orders are filled within the broker's book.
- Dealer discretion: Quotes and fills can be adjusted during volatile moments.
- Conflict of interest: Broker revenue is tied to client losses.
- Wider spreads: Markups compensate the broker for holding client exposure.
Due Diligence
Review a broker's regulatory status and execution statistics so you understand how your orders are handled.
Trading Considerations
- Strategy fit: High-frequency systems often suffer from requotes or delays.
- Hybrid routing: Many brokers run both A-book and B-book desks depending on client performance.
- Slippage control: Expect larger slippage around news releases.
- Record keeping: Maintain screenshots and logs in case you need to dispute fills.
Related Terms
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