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A-book vs B-book: what's the difference?
An A-book broker passes your order out to a liquidity provider and earns from the spread or a commission, so it makes the same money whether you win or lose. A B-book broker keeps your order in-house and takes the other side of it, which means your loss is directly its profit.
Why the distinction matters
It decides whether your broker's interest is aligned with yours. On the A-book the broker is a middleman with no position in your outcome. On the B-book the broker is your counterparty, and every stop-loss you hit is revenue on its books. Neither is illegal, and B-book execution is not automatically dishonest — it is how most retail brokers handle small trades, because hedging every one of them out costs more than it recovers. The problem is that almost nobody tells you which one you are on.
How to tell which one you're on
Ask the broker directly, in writing, and ask for the specifics: which liquidity provider, over which protocol, for which account types. A broker running a genuine A-book can name them. "We use a hybrid model" without further detail usually means everything below a size threshold is B-booked. Also watch execution during news: an A-book fill can slip because the underlying market slipped, but requotes and sudden spread blowouts that only ever move against open positions are a different signal.
What Vexoda does
Live forex flow is A-book: orders are hedged out to tier-1 liquidity providers, so the house never takes the other side of a live trade. B-book is reserved for demo accounts, where there is no real counterparty risk to pass on and nothing is at stake. This is also why demo accounts cost nothing to run.
What it does not mean
A-book execution is not a promise that you will make money, and it does not remove slippage — if the liquidity provider fills at a worse price because the market moved, that price is what you get. What it does remove is the conflict of interest. It also does not mean zero cost: A-book brokers earn from the spread, which on Vexoda is applied on the ask side.
| A-book | B-book | |
|---|---|---|
| Who takes the other side | A liquidity provider | The broker itself |
| Broker earns from | Spread / commission | Your losses |
| Conflict of interest | No | Yes |
| Typical use | Larger or profitable flow | Small retail flow, demo |
| On Vexoda | All live forex | Demo accounts only |