Library term·Microstructure
A-Book vs B-Book Broker Models — Retail Order Routing and Incentive Geometry
Straight-through hedging vs internalisation, KPI conflicts & why execution quality disclosures matter for discretionary traders.
Authored by·Editorially reviewed
Onur Erkan YıldızFounder, Financial Engineer · CMB-licensed
Higher education in Financial Engineering and Money & Capital Markets. SPK (Turkey CMB) licence. 16 years across institutional markets, research, and quant-driven analytics.
Functional split
“A-book” flow is often mirrored into external liquidity; internalisation (“B-book”) nets client exposure on broker books. Hybrids abound.Incentive geometry
Profit per turnover vs churn risk introduces conduct tension regulators police via transparency mandates in mature jurisdictions.Practitioner questions
Latency, rejection rates around news, symmetric reject / requote treatment — empirical not slogans.Finvestopia
Retail literacy acknowledges routing opacity fights with performance auditability.Related entries
Dark Pools Among LPs — Non-Displayed Liquidity vs Lit Price Formation
Mid-match venues, signalling reduction upside, critiques on visible depth starvation & regulatory dialogue.
VWAP vs TWAP Execution — Benchmarks & Implementation Shortfalls
Benchmark tracking error, urgency levers and predatory interaction risk on lit venues for large sleeves.
Educational content authored by our team — informational only, not investment advice.