Glossary
B-book
B-book describes a model in which a broker or firm takes the other side of client trades internally instead of passing them to the market.
What it means
The term comes from brokerage. An A-book broker routes client orders to liquidity providers and earns from spreads and commissions. A B-book broker keeps the risk: when a client loses, the broker gains, and when a client wins, the broker pays. Many brokers run a hybrid, routing some client flow to the market and internalizing the rest.
Retail prop firms with simulated accounts work in a comparable way. Fees fund the business, rewards are paid from revenue, and trades are not placed in the market. Some firms route trades from consistent funded traders to live markets, which resembles A-booking. What matters for traders is that the terms state clearly that accounts are simulated and explain how rewards are funded.
Worked example
Illustrative numbers: a firm sells 1,000 challenges in a month and 60 traders reach funded accounts. None of their trades reach a live market. The firm pays rewards from fee revenue, so it has to model how much it can pay in rewards over time, the same kind of risk a B-book broker manages.
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