The financial market has several acronyms and strategies, and Active RLP (Retail Liquidity Provider) is one of them, aimed at those who invest in variable income.
In short, this tool is a form of “liquidity provisioning” aimed at retail investors, helping to improve the conditions for buying and selling shares.
Furthermore, understanding what RLP is and how it works can make the difference in making more informed and strategic decisions in the stock market.
Therefore, understanding how RLP works and how it can boost your investments is essential to deciding whether it is worth joining.
RLP, or Retail Liquidity Provider, is a service that some brokerages offer to improve the conditions for executing retail investor orders, mainly in the stock and derivatives markets.
The purpose of RLP is to provide more liquidity (i.e., more purchase and sale offers), generally with the involvement of a financial institution, such as a bank or a brokerage firm itself, which acts as a “liquidity provider” in certain transactions.
This practice allows investors, especially those who invest small amounts, to trade shares at better prices, with greater agility and lower costs.
Instead of the investor's order going directly to the market, where he may face volume and price limitations, the brokerage acts as intermediary with its own stock of shares.
This execution model, common in the US, arrived in Brazil in 2020 and has been increasingly offered by local brokers.
When RLP is active in the investor's account, it allows the broker to intermediate their buy and sell orders with greater flexibility.
This means that the broker can carry out its operations without having to send them directly to the market, using the available stock of assets.
This process creates a dynamic in which the investor has a greater chance of obtaining executions at more favorable prices, especially in times of low liquidity in the market.
However, it is important to remember that RLP is not a mandatory service and needs to be activated by the investor.
Many may opt for RLP because of its advantages, but the service may not be ideal for all investor profiles, especially for those who prefer direct trading in the market.
RLP can bring some advantages to retail investors, such as:
The main advantage is the possibility of obtaining order execution at a more advantageous price.
This is especially useful in assets with low liquidity, where small price variations can make a difference in the total cost of the transaction.
As orders are executed within the brokerage firm itself and not directly on the market, there is a reduction in costs with fees and charges.
At some brokerages, using RLP can even result in fee-free operations, an interesting saving for investors who make frequent operations.
In some cases, especially for those who do day trading operations, speed of execution is crucial.
RLP allows the broker to “prioritize” orders internally, reducing execution time and making operations more efficient.
For assets with low trading volume, RLP offers additional liquidity that can be decisive in being able to buy or sell at the desired time and at the expected price.
Most brokers that offer RLP also provide detailed reports on executions.
This way, the investor can closely monitor how and when orders were carried out, providing greater clarity and security.
Not everything is beneficial. An important point to consider is the possibility of conflict of interest.
Since the broker may be dealing directly with the investor, they have some control over prices and can theoretically use this to make a small profit.
Therefore, it is essential to choose a trustworthy broker and always review the terms and conditions of order execution through RLP.
Another risk is the issue of “false liquidity”. Although RLP offers more liquidity, it depends on the broker’s internal conditions.
In times of strong fluctuation, the limitation of the stock of assets reduces the efficiency of the service.
RLP activation varies by broker.
In most cases, the investor can activate or deactivate the service through the application or investment platform itself, but it is necessary to accept the terms of adhesion, which explain in detail how the RLP works.
Many brokers leave the service disabled by default, leaving it up to the investor to choose whether to enable it.
To help you find the best options, we've listed some apps that offer RLP and have received good reviews:
These apps are among the most widely used and offer balanced assessments, allowing investors to compare options before making a decision.
Keep in mind that each broker has its own conditions for RLP, so it's worth exploring each one to find the best fit for your profile.
With advantages such as better order execution, cost reduction and agility, Active RLP can be an excellent choice for those who carry out frequent operations, especially in day trading or in assets with lower liquidity.
Additionally, platforms such as Clear, XP and Modalmais have facilitated activation and monitoring, allowing investors to make decisions with greater transparency and control over their orders.
However, it is essential to understand the conditions offered by the broker and assess whether the RLP makes sense for your strategy.