A-Book and B-Book brokers sit at the centre of every Forex and Contract For Difference (CFD) trade. These same execution dynamics show up in crypto markets, even if the labels look different. In crypto, you’ll hear “exchange,” “market maker,” or “order routing,” but the core question stays the same: does your venue route your order to external liquidity, or does it fill the trade internally and manage the risk itself?
Most traders never look past the marketing language on a broker’s homepage: “ECN,” “STP,” “market maker,” “no dealing desk.” Crypto exchanges do something similar with promises of “deep liquidity,” “tight spreads,” “best execution,” and “zero fees,” while the actual fill can depend on who’s taking the other side and how the venue routes (or internalizes) orders.
If you care about slippage, spreads, re-quotes (in CFDs), liquidation pricing, and whether the venue quietly profits when you lose, you need to understand the A-Book vs B-Book split, and how hybrid models blend both, including in crypto-adjacent CFD products and some exchange execution flows.
Understanding A-Book vs. B-Book Execution
In the world of trading, the “Book” refers to how a broker handles your order. The model they choose determines whether they act as your agent (passing your trade to the market) or your counterparty (taking the other side of your trade).
1. A-Book Brokers (The Agency Model)
An A-Book broker routes client orders directly to external Liquidity Providers (LPs) like banks or prime brokers. This is commonly referred to as STP (Straight-Through Processing) or ECN (Electronic Communication Network) execution.
- How it Works: You place a trade, and the broker instantly “mirrors” that trade with an external source. They hedge your position 1:1 in the real market.
- Revenue Model: The broker makes money through a transparent commission or a small markup on the spread. They want you to succeed because the longer you trade, the more fees they collect.
- Execution Reality: You experience “authentic” market conditions. This means you may encounter symmetrical slippage (both positive and negative) and partial fills during high volatility.
- Best For: Scalpers, high-volume traders, and those using Expert Advisors (EAs) who require execution integrity.
2. B-Book Brokers (The Market Maker Model)
A B-Book broker internalizes your trades. Instead of routing your order to the market, the broker acts as the counterparty—when you buy, they sell to you from their own “book.”
- How it Works: Your trade stays inside the broker’s system. They manage the risk internally by netting “long” clients against “short” clients and only hedging the leftover exposure if it becomes too risky.
- Revenue Model: The broker earns from the spread and, potentially, from net client losses. Because they are taking the opposite side of your trade, your profit is technically their loss (unless they have hedged externally).
- Execution Reality: Because the broker controls the environment, they can offer “instant” fills on tiny orders and fixed spreads. However, this creates a structural conflict of interest.
- Best For: Casual retail traders or those with micro-accounts who prioritize simplicity and low minimum deposits over raw market access.
A-Book vs B-Book: Side-by-Side Comparison
Most retail forex/CFD brokers sit somewhere on an A-Book–B-Book spectrum or run a hybrid of both. A similar spectrum exists in crypto: some platforms mostly route to external market maker liquidity and broader venues, while others internalise retail flow and manage risk in-house. The core difference stays the same—A-Book behaves like an agent passing orders to the market, while B-Book behaves like a principal taking the other side.
| Aspect | A-Book Broker (STP/ECN) | B-Book Broker (Market Maker) |
| Order handling | Routes trades to external LPs / market | Internalizes trades; broker is your counterparty |
| Broker profit source | Spreads + commissions | Spreads + client trading losses (net of hedging) |
| Market risk to broker | Limited, mostly hedged | Significant; managed via internal risk models |
| Conflict of interest | Lower – broker wants volume & long-term clients | Higher – structural incentive to profit from losing clients |
| Pricing | Based on LP/ECN quotes; may widen in volatile markets | Broker-controlled; can hold tight spreads in calm markets |
| Execution control | Heavily dependent on LP quality | Full control of fills, slippage, and requotes |
| Transparency (typical) | Often markets itself as STP/ECN, agency, or A-Book | Often labelled “market maker”, “dealing desk”, or “B-Book” |
| Typical users | More active or sophisticated traders; some institutional | Mass retail, micro-accounts, low minimum deposits |
How to Tell If Your Broker Uses A-Book or B-Book
Brokers rarely advertise B-book execution. To find the truth, examine:
- Regulatory disclosures and legal docs – Look for terms like “market maker”, “dealing on own account” (B-Book) or “matched principal / STP / agency model” (A-Book).
- Order Execution Policy – Firms in the EU/UK must publish execution policies. These often state whether the broker acts as principal and internalises orders, or passes them to external venues.
- Marketing language vs fine print – “No dealing desk” and “STP/ECN” language points towards A-Book, but many “NDD” brokers still run hybrids. Always confirm in the legal docs.
- Trade behaviour patterns – Frequent requotes or asymmetric slippage might indicate aggressive dealing-desk settings. Very tight spreads with small deposits and generous bonuses often correlate with B-Book or hybrid models.
- Direct questions to support – Serious brokers will typically acknowledge that they use A-Book/B-Book/hybrid and may explain at a high level how they manage risk and conflicts.
If you can’t get a straight answer—or if the broker is unregulated and evasive—it’s a red flag regardless of the execution model.
Which Model Is Better?
There is no universal winner. The “better” model depends on what you value and how disciplined the broker is.
- A-Book focus suits traders who care about:
- lower structural conflict of interest;
- transparency around external liquidity;
- potentially better alignment for high-volume or profitable strategies.
- B-Book / hybrid models can suit smaller retail traders who want:
- low minimums and simple pricing;
- tight promotional spreads;
- a one-stop, app-style experience—provided the broker is well-regulated and reputable.
The real line to draw is not A vs B, but transparent, well-run vs opaque, poorly governed. A compliant B-Book/hybrid broker with robust controls beats an unregulated “STP” broker that misrepresents what it does.
Choosing the Right Model and the Right Infrastructure
A-Book and B-Book models define your broker’s risk management and profit motives. A-Book brokers route trades to external liquidity providers, profiting from volume and client longevity. In contrast, B-Book brokers internalize trades; while this can lead to conflicts of interest, it often allows for tighter spreads and lower entry barriers for retail users.
As a trader, prioritize well-regulated brokers with transparent execution that you can independently verify. If you are a builder launching a platform, your success depends on a robust infrastructure that seamlessly supports these routing models.
Whether you are a trader or a platform builder, your success depends on the infrastructure. ChainUp provides the institutional-grade liquidity and custody rails that drive these ecosystems: MPC-based wallets, granular policy controls, and multi-source liquidity connectivity that seamlessly supports both A-Book and B-Book flows.
