The China Mail - STARPRIME Completes Beta Testing of Market-Maker Model for Retail Brokers

The driver of the product innovation and development has been to find the ‘sweet spot’ in solving some of the main challenges that larger retail brokers face:

• Optimal efficiency in externalising Non-Risk Flow
• Non-Risk Revenue dilemma (aka “flattening the curve”)

Optimal efficiency in externalising Non-Risk Flow

Whilst retail brokers seek the liquidity provided by traditional liquidity providers (Tier-1 LPs, ECNs, Banks), they struggle to make these offerings commercially viable, mainly as a direct result of wider spreads and higher margins compared to the retail model they operate under. This makes externalising flow commercially unviable, leaving retail brokers to manage greater exposure and risk than they would otherwise need to.

With the option of trading through a Market-Maker model, clients can trade on pricing and margins that are more closely aligned with the retail model, with the market maker managing the pricing and margin differential to LPs. The market maker absorbs the differential between retail-aligned pricing and LP pricing, supported by internal netting across aggregated flow and by scale. Retail brokers can access institutional-grade liquidity through a single relationship, reducing operational and capital costs.

Non-Risk Revenue dilemma (aka “flattening the curve”)

Retail brokers will be all too familiar with the changing dynamics and revenue streams in our industry. Over the past several years, the amount of Non-Risk Revenue being generated has been converging with the amount of risk revenue being earned. This comes as no surprise as the retail market is becoming more informed; with developing skill sets and technology (including AI), retail clients are becoming more profitable and are increasingly able to preserve their capital in volatile market conditions.

A number of participants in the beta release were able to identify client segments where the ‘Non-Risk revenue’ was close to or greater than the ‘risk revenue’. This highlighted the obvious Expected Value Trade-Off, where the most a broker could make would likely be the ‘Non-Risk revenue’, whilst the potential losses could be much greater. By externalising the flow through the Market-Maker model, they were able to manage their market risk and identify potential revenue opportunities across these segments of their client base.

Market Maker vs STP Solutions

In a like-for-like analysis, and in keeping with the general expectations of a Market-Maker Model, STARPRIME observed that the Market-Making model provided clients with key potential advantages across core metrics. Pricing included faster price updates and tighter spreads, particularly in volatile market conditions. Order fill efficiency was closer to optimal, particularly with larger order sizes. Market impact was greatly reduced, which ultimately resulted in greater overall efficiency. Naturally, the metrics will vary, primarily driven by the underlying nature of the order flow, although it was noted that there were clear improvements even on sharper flow.

Jay Mawji, CEO of STARPRIME, added: “As much as we may want to deny it, the pace of the Race to Zero is gathering each day. By deploying our market-maker solution and applying consistent pricing across the flow we accept, we are able to offer our clients execution at costs closer to their retail model than a traditional LP relationship allows. This promotes a healthy industry, where the Race to Zero is a phenomenon that should be embraced by all market participants in a responsible manner that promotes advancements in our industry with tighter pricing and stronger competition. 

Potential clients can view average pricing directly on the STARPRIME website (www.starprime.com)under the Pricing Section (https://www.starprime.com/spread/). This tool will be further enhanced to present execution metrics and use cases, in a bid to push for increased transparency and informed decision-making for potential clients.

About STARPRIME

STARPRIME was built around a clear understanding: institutional clients need more than access to liquidity. They need a partner that understands their business, responds to their changing requirements, and provides the infrastructure and expertise they can rely on as they grow.

Today, STARPRIME is an established institutional CFD liquidity provider and market maker, combining deep multi-asset liquidity with advanced pricing technology, low-latency execution, and dedicated client coverage. Its solutions are shaped around each client’s flow, scale, and market requirements, with a focus on transparency, consistent performance, and lasting partnerships.

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Source article: https://financewire.com/2026/08/19/starprime-completes-beta-testing-of-market-maker-model-for-retail-brokers/

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