Liquidity Aggregation in FX
Liquidity aggregation combines price streams from multiple sources into a single composite view, enabling best execution for institutional FX participants.
Why Aggregation Matters
The FX market is fragmented across dozens of venues and hundreds of liquidity providers. No single source consistently offers the best price. Aggregation technology collects streaming prices from multiple banks, ECNs, and non-bank market makers, building a composite order book that identifies the best available price at any moment.
Smart Order Routing
Smart Order Routing (SOR) is the execution layer of aggregation. When a client wants to trade, the SOR algorithm determines the optimal way to fill the order -- potentially splitting it across multiple venues to minimize market impact and achieve best execution. SOR considers price, latency, fill rates, and venue toxicity.
Technology Providers
Companies like Integral, oneZero (XConnect), and others provide aggregation and SOR technology. These platforms connect to dozens of liquidity providers via FIX protocol and offer risk management, analytics, and execution management capabilities.