Top picks for market makers
Best overall market maker broker - IG
| Company |
Overall Rating |
Minimum Deposit |
Average Spread EUR/USD - Standard |
Execution: Market Maker |
 IG
|
 |
£250.00 |
0.98 info |
Yes |
IG is my top choice for a market maker broker in 2024 thanks to its ability to effectively execute large orders, with over $5 million in automatic execution across popular major currency pairs. Publicly traded and highly regulated in multiple Tier-1 jurisdictions, IG holds one of our highest Trust Scores and ranks at or near the top of almost every category we cover.
IG provides institutional market making to wholesale clients and other brokerages and has earned a long-standing reputation as a trusted dealer relied upon by large institutions and retail traders alike. IG offers multiple execution methods beyond the market making option available on its standard account. Traders seeking agency execution at IG can opt instead for its commission-based Forex Direct account (similar to an ECN model). To learn more, read my full IG review.
Reliable market maker execution for large orders - Saxo
| Company |
Overall Rating |
Minimum Deposit |
Average Spread EUR/USD - Standard |
Execution: Market Maker |
 Saxo
|
|
$0 |
1.1 info |
Yes |
Saxo is an excellent choice for market maker execution – particularly for large orders. It offers automated execution for trades up to $20 million on major currency pairs and is a trusted market maker for institutional clients, providing liquidity to other brokers due to its reliable execution methods. With well-rounded pricing, including deeper discounts for Platinum and VIP account holders, Saxo is a great choice for traders wishing to benefit from stellar execution on high-value trades.
One of the most highly trusted and regulated multi-asset brokers we cover, Saxo is part of a major banking conglomerate headquartered in Denmark with over $100 billion in client assets as of its latest annual report, published in 2024. Read my in-depth Saxo review to learn more.
Excellent pricing for a market maker - CMC Markets
| Company |
Overall Rating |
Minimum Deposit |
Average Spread EUR/USD - Standard |
Execution: Market Maker |
 CMC Markets
|
|
$0 |
0.61 info |
Yes |
CMC Markets is a great choice for traders seeking a market maker broker with competitive pricing that ranks above the industry average. CMC Markets is a highly trusted, publicly traded multi-asset broker that holds licenses from multiple top-tier financial centers.
A market maker for both retail and professional clients alike, CMC Markets is relied upon by financial institutions for its ability to deal as a principal across a vast array of asset classes and markets globally. Active retail traders may also enjoy its commission-based pricing structure offering highly competitive spreads. Read my full review of CMC Markets to learn more.
Compare the best market maker brokers
| Company |
Overall Rating |
Execution: Market Maker |
Minimum Deposit |
Average Spread EUR/USD - Standard |
|
IG
|
|
Yes |
£250.00 |
0.98 info |
|
Saxo
|
|
Yes |
$0 |
1.1 info |
|
CMC Markets
|
|
Yes |
$0 |
0.61 info |
 FOREX.com
|
|
Yes |
$100 |
1.4 info |
 City Index
|
|
Yes |
£100.00 |
1.4 info |
 XTB
|
|
Yes |
$0 info |
1.00 info |
 eToro
|
 |
Yes |
$50-$10,000 |
1 info |
FAQs
What is a market maker?
The phrase “market maker” refers to a dealer (or, broker) that, quite literally, makes markets. A market maker establishes prices and executes orders to buy or sell at those prices in order to capture the spread between them. Market makers profit both from this spread and potentially from any risk they internalize by holding the opposite side of your trade.
There are two sides to every trade: one side is simultaneously buying or selling to the other. A market maker either takes the other side of your trade (internalizes the risk) or sells it to another entity (externalizes the risk). An agency broker only does the latter; by sending the order to another dealer or market maker to execute the trade (externalizing the risk), agency brokers capture a small commission from the spread.
The differences between market maker brokers and agency brokers are often blurred because many brokers may use a combination of these approaches (or may even claim to be one while secretly doing the other). In addition, untrustworthy market maker brokers may employ questionable dealing practices that put traders at a disadvantage.
What are the different types of brokers?
While your broker may match your trade to another client, send your order to another broker to execute, or take the other side of your trade directly as a market maker, they are always the counterparty to your trade. The three types of brokers you might deal with are:
- Market Maker Brokers: Executes your order internally by taking the risk on the opposite side of your trade (internalizing the risk).
- Agency Brokers: Sends your order to another market maker broker (known as a liquidity provider) to execute your trade (externalizes or offloads the risk).
- Hybrid brokers: This broker does both. Be aware: Some hybrid brokers may claim to be agency-only brokers sending all orders to external liquidity providers (LPs), but in reality are sending some orders to their own market maker entity/liquidity provider.
people_altCaution:
Some brokers claiming to be agency brokers send to a single LP in which they have a common interest. I consider this activity to be akin to a pseudo-market making model: these brokers claiming to be agency brokers are market makers in reality but have simply added a level of separation to obfuscate their activity.
Who are the largest market makers?
The largest market makers are institutional brokers engaged in proprietary trading, such as banks or hedge funds. They are responsible for trading billions or even trillions of dollars worth of assets each day. These companies use their own capital to act as market makers and internalize risk in line with their overall financial strategies.
For example, Flow Traders and Virtu are two large market maker proprietary trading firms (commonly known as prop trading firms). While they don't offer brokerage services to retail clients, there’s a good chance that when you are trading with a broker that sends your order to an exchange, they are the market maker selling to you when you buy (or, buying from you when you sell).
Citadel Securities is another large market maker with a mandate to make markets on the New York Stock Exchange (NYSE) as a designated market maker (DMM). This designation means that for certain securities Citadel has to be willing to be a counterparty to a trade to ensure the market functions properly, and not just to make a profit. In other words, even if everyone else is buying a security and the price is going up, a DMM would have to sell into that buying frenzy as part of its mandate.
Who are the largest crypto market makers?
Some of the larger over-the-counter (OTC) market makers that operate institutional trading desks or offer crypto execution services from their platform to retail and institutional clients in 2024 include the following crypto brokers:
- Coinbase Pro
- TradeStation Crypto
- eToro
- DRW Cumberland
- Virtu Financial
- Citadel Securities
- Fidelity Crypto (does not disclose LPs)
How do market makers make money?
Market makers make money by capturing the spread (difference between the bid/ask price) on your trade. By exiting their side of the trade and immediately buying back at the asking price, market makers can capture the spread and turn a profit. Alternatively, a market maker broker may hold onto their position on the other side of your trade and internalize the associated risk. This just means that the market maker is willing to weather the risk that comes with holding onto the position to capture potential profits (or losses).
psychology_altDid you know?
Rather than managing each individual trade, a market maker may aggregate the exposure of many trades for a given asset and reduce its positions when a certain risk threshold is reached. Risk may be measured by trade size, average stop-loss order value, or other metrics.
Do market makers trade against you?
Yes; by definition, market makers take a position on the opposite side of your trades – buying when you sell and selling when you buy – but that doesn't mean market makers actively care whether you make or lose money on those trades. It all comes down to how the market maker manages its risk.
In a perfect world where market makers are following the rules and acting ethically, there would be no concern that market makers are actively hoping (or, causing) you to lose money when taking the opposite position in your trade. However, given the potential for a conflict of interest (and the growing number of scam brokers), there have been examples of disingenuous market makers engaging in unfair trade practices over the years, such as stop-loss hunting or asymmetrical slippage.
Every market maker wants to make money, so it's crucial that you only use highly trusted brokers to ensure that your interests are aligned and that they are not trading against you on purpose. The key is to understand their available execution methods and trading costs and to find a broker that can handle your trading needs.
taxi_alertPSA:
Even reputable brokers may have risk management strategies for different client groups and move your account to a different execution method if they cannot manage your needs in a manner that is consistently profitable to them. It's important to understand your broker’s terms and conditions and the scope of options available to you if a dispute arises related to trade execution.
What is an ECN forex broker?
The Electronic Communications Network, or ECN, is a computerized and centralized order book where clients are automatically matched and the size of each order is visible to all parties. While this has worked to a certain degree in other asset classes, like crypto exchanges, for forex markets they have largely failed to attract meaningful volumes except for a few real ECN trading venues (i.e., LMAX, which is regulated as an exchange).
The main concern for traders using an ECN model is that slippage can have a more significant impact on market prices due to limited volumes at the top of book prices (orders occurring at current market prices). As a result, a large market order that cannot be completely filled at the current price will experience partial fills at progressively worse prices.
sync_problemWhat about crypto order books?
These challenges are also observed with a decentralized order book such as an automated market maker (AMM) on a Decentralized Exchange (DEX) like Uniswap. If not enough liquidity is present when a large order hits a DEX, it can cause slippage that is proportional to the trade size despite an attempt to track an underlying benchmark or external price.
What is the difference between market makers and ECN brokers?
Market makers are actively establishing the market prices where they are dealing for traders, while an ECN is a place where traders can place orders in the hope they will be automatically filled by other matching orders or market makers also trading on the platform.
The main difference is that on an ECN, if you don't have enough liquidity and orders available for a proper depth of book, your market order could get filled at a worse price if the full amount isn’t available at the current spot price.
A market maker broker will usually handle this issue by placing limits on the number of orders you can execute in an automated manner, in addition to maximum position limits per asset or a limit on the overall number of orders you can place at any one time.
What are the advantages of trading with a market maker?
I've found that the biggest advantage that comes with using a market maker broker is that you'll likely experience less slippage and fewer rejected orders, compared to agency execution. A market maker broker establishes the market prices and executes your orders directly rather than relying on a third party.
The market maker is also ultimately responsible for itself when it comes to trade execution. By contrast, any issues that arise with an agency broker could be out of their control as they may blame the external market makers they are using (i.e., the liquidity provider or execution venue they passed your trade to for fulfillment).
What are the disadvantages of trading with a market maker?
The biggest disadvantage of trading with a market maker is that if you're consistently making money, there is a chance that your execution quality could suffer if the broker decides to move you to a different client group. Not all market maker brokers will do this, and the decision to move you will depend on the terms and conditions for your account, the size of your profits and overall trading balance, and (perhaps most importantly) how the broker manages its risk.
This same disadvantage may exist when you are dealing with an agency broker. When your trade is sent to a third-party market maker for execution, the agency broker can also run into the same issues that might cause the market maker to alter the execution quality.
Our testing
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Steven Hatzakis is a well-known finance writer, with 25+ years of experience in the foreign exchange and financial markets. He is the Global Director of Online Broker Research for Reink Media Group, leading research efforts for ForexBrokers.com since 2016. Steven is an expert writer and researcher who has published over 1,000 articles covering the foreign exchange markets and cryptocurrency industries. He has served as a registered commodity futures representative for domestic and internationally-regulated brokerages. Steven holds a Series III license in the US as a Commodity Trading Advisor (CTA).
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