The difference between an STP broker and a Market Maker Forex brokers function under two execution order methods, categorizing them as STP brokers or Market Makers. Some companies offer both services making them both an STP broker and a Market Maker. STP brokers are always perceived as more trustworthy and popular. STP stands for Straight Through Processing, and that applies to order execution. With an STP broker all the orders done by a client on a platform instantly go to liquidity providers exactly as they are. The company has no control or influence on the orders, that’s why STP brokers are advertised as a ‘No Dealing Desk’ broker. Market Makers on the other hand have a dealing desk. The dealing desk consists of employees who monitor the trades, receive the orders and in turn send them to the market. This small intervention gives the opportunity for price manipulation by changing the pips or making any changes which can affect the outcome of a trade. This form of execution can slow down an order, every second from the moment an order is made to the moment its executed counts, because prices can change in fractions of seconds, when a dealing desk becomes the mediator. Another prominent feature of STP brokers is that they show market prices on their platform as they are. They are directly connected to the global market and traders will get accurate untouched prices. Market Makers also use a dealing desk to deliver the prices to their clients, requiting market prices and then showing them to traders, who will execute their trades based on these prices. Based on the mentioned many traders prefer and trust STP brokers more than market makers, but many traders still prefer trading with market makers, and not all market makers take advantage of their dealing desk and manipulate prices or orders. Either way when deciding to trade with a new company checking all aspects of it, and making sure it suits you best should be the priority. fxnet/news/the-difference-between-an-stp-broker-and-a-market-maker FxNet Ltd is a global, fully licensed Over the Counter (OTC) online Forex and commodities broker, regulated by the Cyprus Securities and Exchange Commission (CySEC). FxNet is located in Limassol Cyprus. FxNets mission is to reach and retain traders around the globe through exceptional customer service, integrity and continuous innovation that will provide our clients with simple, exciting and secured trading platforms.
Posted on: Fri, 24 Jan 2014 09:49:29 +0000