Liquidity Provider

Liquidity providers are trading members that act as a market makers by facilitating trading in securities and other financial instruments by providing a pool of shares so that buyers and sellers can trade easily. In other words, they make securities liquid. Liquidity providers are often large banks and other financial institutions but it can also be an individual or a private firm. Algorithmic trading helps in increasing liquidity as large number of orders are placed in short period of time and thus more orders that create more liquidity in the market.