High liquidity in forex trading is sought after because it decreases the spread and hence the overall cost of trading. Liquidity providers, acting at both ends of a trading transaction, allow their clients to hedge their risks. The liquidity of the joint market is increased through the connection of various brokers, banks, hedge funds, traders and other financial institutions. By selling and buying certain financial instruments at certain prices, liquidity providers become the direct counterparties for all executed trades with the clients and guarantee the prices at which all transactions are hedged.