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One of the first business decisions a new broker faces is how to handle client orders: keep them in-house (B-book), pass them to the market (A-book), or mix both. The choice shapes your revenue, risk and regulatory obligations.
What Is B-Book?
In a B-book model the broker takes the opposite side of client trades. If the client loses, the broker keeps the loss as revenue; if the client wins, the broker pays. Over a large group of retail clients, statistically more lose than win, which is why B-book can be highly profitable, but it also brings market risk and, in some jurisdictions, conflict-of-interest scrutiny.
What Is A-Book?
In an A-book (agency) model, orders are passed to a liquidity provider or prime broker. The broker earns from spreads markup and commission, regardless of whether the client wins or loses. Revenue is steadier, risk is lower, but income per client is typically smaller.
Hybrid Models
Most brokers run a hybrid: route profitable or high-volume clients to the A-book, keep small and typical retail flow on the B-book, and set rules by account group, size, strategy or trading pattern. This is usually where experienced brokers land.
Comparison
| Factor | A-book | B-book |
|---|---|---|
| Revenue source | Spread and commission | Client losses plus markup |
| Market risk | Passed to LP | Held by broker |
| Capital needed | Lower | Higher buffer |
| Conflict of interest | Minimal | Present, disclosure often required |
| Best for | Stable, compliance-led | Profit-focused, well-capitalised |
What This Means for a New Broker
Starting with grey label, you usually operate with the provider’s infrastructure and flexible B-book arrangement: our plans include unlimited B-book with no volume or PnL charges, so your profit stays yours. As you grow you can add a liquidity bridge and begin routing selected flow externally. Read MT5 grey label explained for how it fits together.
Risk Management Basics
- Set exposure limits per symbol and per client
- Monitor profitable accounts and route them to A-book
- Keep adequate capital for volatility events
- Use your CRM and Manager API data to flag patterns, see Manager API and CRM integration
Regulation Note
Rules about execution disclosure and conflicts of interest vary by regulator. Confirm requirements for your target markets before you finalise your model. For setup order, see our forex broker setup guide.
Get Started
We can help you launch with the right execution setup. View pricing or talk to our team.