What are synthetic symbols, and why do I need them?

Author: Baiana Kashaeva

Not long ago, the Trade Processor liquidity bridge introduced synthetic instruments to respond to popular demand. For anyone unfamiliar with the tool, we’ve decided to write this article to explain what it is and how brokers can use it in a bit more detail.

What is a synthetic instrument?

Synthetic instruments are sometimes called synthetic liquidity because they allow brokers to create new symbols that are not a part of the traditional offering.

For example, let’s say we have the popular EURGBP currency pair. Conversely, the GBPEUR pair is less common and might be unavailable to a broker’s traders. With synthetic liquidity, brokers can create synthetic symbols, such as GBPEUR, and offer them to clients.

Why do I need synthetic instruments?

Synthetic instruments help brokers achieve several goals:

• Offer unique currency pairs.
• Stand out from the competition.
• Attract new and retain existing clients.
• Diversify portfolio.
• Lower brokerage risks.

For traders, synthetic symbols can be a way to diversify their portfolios and experience a lower impact from market fluctuations and volatility.

Synthetic instruments are easy to create and integrate into the trading process, so if you are interested in trying them, please email us at sales@t4b.com, and one of our team will be in touch with you shortly. Please note that synthetic instruments are only available to Trade Processor customers at no extra cost.