B-book vs A-book explained: how forex brokers route flow

By Ken Chigbo, Founder, KenMacro. Published 2026-05-12.

What is B-book vs A-book?

A-book and B-book are industry terms for how a forex broker handles a given client order. A-book (the agency model) means the broker passes the order through to an external liquidity provider and earns either a commission per lot or a small spread markup. The broker has no directional exposure to the trade. B-book (the principal model) means the broker takes the opposing side of the trade on its own balance sheet and profits or loses based on the client’s outcome. Almost no retail broker runs purely A-book or purely B-book; the dominant model in 2026 is hybrid, where the broker scores each client and routes profitable flow A-book (to neutralise loss exposure) and unprofitable flow B-book (to retain the spread plus the eventual loss).

How traders use B-book vs A-book

The B-book vs A-book distinction matters because of incentives. On A-book flow, the broker wants the client to trade more and win, because volume drives commission. On B-book flow, the broker structurally wants the client to lose. Regulated venues mitigate this with conduct rules, but the incentive remains. A trader can probe the routing model by trading consistently profitable strategies for several months; if a broker selectively rejects, requotes, or slips fills against the trader, the trader is being treated as B-book flow and the venue is filtering. Switching to a true ECN at that point typically resolves the issue. The desk reviews document each broker’s stated routing policy and observed conduct.

Common misconceptions about B-book vs A-book

The biggest misconception is that B-book is always predatory. A regulated B-book broker that nets aggregate client exposure and hedges residuals does not actively trade against any individual client; it manages a book in aggregate. The second is that A-book is always cheaper. A-book flow carries explicit commission costs that can match or exceed B-book spread markup. The third is that any broker advertising raw-spread accounts is fully A-book; in practice, most retail brokers run hybrid models with raw-spread accounts that still B-book unprofitable clients. The only fully A-book retail venues are the true ECNs with documented multi-bank liquidity stacks.

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Frequently asked

How do I know if my broker B-books me?

Brokers rarely disclose individual routing decisions. Indirect signals include selective requoting on profitable trades, asymmetric slippage that consistently goes against the trader, frequent connection issues during winning trades, and conditional bonuses tied to volume. Trading a known positive-expectancy strategy for 50 to 100 trades and tracking fill quality is the most direct probe.

Is B-book illegal?

B-book execution is legal and widely practised by regulated retail forex brokers globally, including FCA, ASIC, and CySEC-regulated venues. The model is permitted under conduct rules that require segregated client funds, fair execution, and audited financial reporting. Offshore unregulated B-book operations carry materially higher counter-party risk because the conduct rules do not apply.

Are ECN brokers A-book?

True ECN brokers route every client order into an aggregated multi-bank liquidity pool and are structurally A-book on all flow. Some venues advertising ECN accounts are actually hybrid; verify by checking documented liquidity providers, commission structure (true ECN charges per lot), and conduct on consistently profitable trading.

Educational analysis only. Past performance does not guarantee future results. Manage risk against your own portfolio.