STP, ECN and Dealing Desk Forex Brokers Explained

STP stands for Straight Through Processing and is the process that some brokers use to remit the orders straight to their liquidity providers. An STP brokers could have more than one liquidity provider and it will be able to process order in a quick manner but STP brokers make money on spreads, thus even though they do not have a physical dealing desk to monitor and counter-trade client orders.

STP forex brokers are also interested to see their clients trading profitable, so that a broker can continue earning on spreads.

ECN stand for Electronic Currency Transfer. It is view in the industry as a more fair way of facilitating CFD and Forex trader a fairer trading experience without the need for brokers to be the middle man. ECN brokers providers a marketplace where all orders interact with other clients orders in the open market, like this the market remain competive with sell and buy offers in real time.

ECN brokers profit from commission when clients submit theirs orders. Therefor ECN brokers are interested that client keep winning so they don’t run out of capital to trade.

Dealing Desk brokers are typically those who have a physical trading desk with actual traders trading in financial products, mainly banks and financial institution like hedge fund or investment banks. Some are hybrid system like including STP or ECN facilities.

In general this types of broker profit from commission, wide spread and offset the amount off liquidity that they could be exposed to. Meaning that in most cases they will hedge against their client position.

Let’s get started...

Broker Rating Markets Available Fees Open an Account
Kawase Logo
1 Star2 Stars3 Stars4 Stars5 Stars
Rating 3.44 /5
(16 votes cast)
Shares, Indices, Forex and Oil Spread From 0.1 and 0.2% Commission Visit Website
MaxFx Logo
1 Star2 Stars3 Stars4 Stars5 Stars
Rating 4.66 /5
(90 votes cast)
Indices, Forex, Metals, Shares From 0.1 Raw Interbank Spread Visit Website
London Capital Group (LCG) Logo
1 Star2 Stars3 Stars4 Stars5 Stars
Rating 0.43 /5
(127 votes cast)
CFDs - Foex, Indices, Stocks, Commodities, Bonds, Interest Rates Variable spreads from 1.2 and small 0.1 commission on Shares Visit Website

Login to Comment

Share your experiences with our community. You must be logged into post a comment. Sign up as new CFDMaster member or Log in using your Facebook account and get instant access today!

Risk warning: Your capital may be at risk. CFD trading is suitable for experienced traders and not beginners.