ECN / STP Broker Comparison 2022

STP stands for Straight through Processing, which means direct transmission. As with an ECN broker, orders are passed directly to the liquidity network and there is no dealing desk in between. In the best case, it can even happen that several banks compete for an order. To opposite of a market maker In order to remain at an advantage, the liquidity pool should be as large as possible so that prices are not formed by just one or a few banks. A difference to the ECN broker is, that private traders can also belong to the liquidity pool.

In contrast to an ECN/STP broker, the courses are generated via an internal dealing desk. The main difference with these is that a market maker generates the prices themselves brokers. The spreads are usually lower with an ECN/STP broker than with a market maker. Sometimes an additional order fee is charged. However, ECP/STP Broker more suitable for the experienced trader. All customer orders are executed internally by market makers. To find an imbalance (buy or sell orders) on the real A market maker can hedge against balancing the market. In the worst case, a conflict can arise between the customer and the broker. The customer's profits would be then the broker's losses, and vice versa.