🏦 Brokers·intermediate

STP Broker

Also called: straight through processing

A broker that routes orders straight through to liquidity providers without dealer intervention — similar to ECN but less transparent.

STP stands for Straight Through Processing. An STP broker passes your orders directly to its liquidity providers (banks and prime brokers) without any dealer intervention. Unlike ECN, STP brokers usually mark up the spread slightly rather than charging a commission. The execution is still transparent and the broker still doesn't take the other side of your trade. STP is often grouped with ECN as "no dealing desk" (NDD) brokers. Both are preferred over market makers because they don't profit from your losses. The difference between ECN and STP is mostly about how costs are presented: ECN = raw spread + commission, STP = slightly wider spread with no commission. For retail traders, STP is a good middle ground. You get no-conflict execution without having to calculate commissions separately. For high-volume scalpers, ECN is typically cheaper because the commission model scales better.

Real trade example

IC Markets and Pepperstone are well-known STP/ECN hybrid brokers that pass most orders through to liquidity providers. Their spreads are typically 0.1-0.4 pips on major pairs during active sessions.

Related terms

ECN Broker

intermediate

A broker that routes orders directly to a network of liquidity providers without taking the other side — no conflict of interest.

Market Maker Broker

intermediate

A broker that takes the other side of your trades — they profit when you lose, creating an inherent conflict of interest.

Broker

beginner

The company that gives you access to the forex market — the middleman between you and the currency you want to trade.

Spread

beginner

The difference between the buy (ask) and sell (bid) price — your cost of entering a trade.

Liquidity Provider

advanced

A bank or institution that provides buy and sell quotes to brokers — the wholesale source of forex prices and fills.

Spread Betting

intermediate

A UK-specific way to speculate on price movements of financial markets — treated as gambling, so profits are tax-free in the UK.

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