A forex broker, also known as a retail forex broker, or currency trading broker, in modern financial and commercial trading means an intermediary who buys and sells a particular asset or assets for a commission. Thus, a broker may be thought of as a salesman of financial assets. The origin of the term is unclear, though it is thought to stem from old French.
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Around the year 2000, retail brokers began offering online accounts to private investors, streaming prices from major banks and the Electronic Broking Services (EBS) system. The brokerages were able to provide retail service by bundling many small trades together and negotiating them in the interdealer market, which is dominated by banks. Because the trade volumes were much larger, participants in the interdealer market were willing to provide liquidity for the retail brokers’ accessible prices. Bid-ask spreads are generally higher for retail customers than they are in the interdealer market, but they have been found to narrow as trading volume rises.5)