Indices Brokers Types

ECN, STP, NDD, DD, Market Makers

The list below shows the different categories of indices brokers classified depending on their execution technique.

ECN

ECN Indices Trading Account stands for Electronic Communication Net-work, these ECN Indices Trading Account brokers are connected to the interbank network directly through an electronic communication network & indices orders from the ECN Indices Trading Account are placed straight to the electronic network. ECN Indices Trading Account will display different orders from different banks. Indices quote placed by these ECNs net-work of banks are direct from them to the inter bank network and orders are executed directly to the inter bank market once a trader trading with this ECN account places an order with their indices broker,

These ECNs account will charge commissions + spread for every indices trade. For these ECN Indices Account execution method every trade is matched to another in realtime over the interbank network - ECN Network.

STP

STP Indices Trading Account stands for Straight Through Processing, the STP Indices Account brokers will send client orders direct to their Indices Liquidity Provider, the Indices Liquidity Provider is a large bank with deep liquidity to trade on the interbank network.

An STP Indices Trading Account provided by an STP stock indices trading broker can either have one Indices Liquidity Provider or many liquidity providers.

The best thing about STP Indices Trading Accounts is that stock indices traders can place their stock indices trades immediately with instant execution because they have access to interbank markets via their STP stock indices trading broker.

STP Indices Accounts will not charge commissions, but will charge spread on stock indices trades. Because traders have access to inter-bank market execution, there's no re quotes on the indices orders neither any trade order waiting for execution, order execution is instant.

Difference between STP and ECN Execution

NDD

NDD stand for Non-Dealing Desk indices trading execution of orders, these NDD Indices Account brokers don't implement a dealing-desk this makes this type of order execution to have less trading restrictions as opposed to the Dealing Desk Execution.

NDD Execution means that trades from the traders account will be executed directly to online interbank exchange stock index market. Orders will be matched with other orders in the online stock indices market using the broker Non Dealing Desk trade order execution model.

DD

DD stands for dealing-desk, these DD account indices brokers have a dealing desk execution model where they can match orders & execute indices order in the online stock indices market.

The indices trader trading with a DD account will get a lot of re-quotes.

Dealing Desks will issue indices traders with a lot of order re quotes, meaning indices prices of orders are not real-time and stock indices trading broker can requote a indices trader's order if the stock indices price of the stock indices trading market changes quick enough before the broker's dealing desk places the trading order online or before they match the order in the online stock indices market.

Dealing Desk accounts therefore means that order execution of stock indices orders isn't instant & therefore this execution model might mean that orders executed using a DD Indices Trading Account are not executed as quickly as when compared to an ECN trading account or an STP trading account.

Market Makers

Market Maker are indices broker accounts where Market Maker indices brokers have a dealing desk execution model where they can match the orders in house without going to the stock indices market.

Indices orders can also be executed against their traders - meaning the broker can take the opposite side of a traders open trades. This stock indices trading broker can make the decision to either execute a stock indices order that is the opposite of a indices trader's order thus if the trader makes a loss the broker makes a profit, & if indices trader makes a profit the broker makes a loss.

Regulated Indices Brokers

Regulated Indices Brokers are those that operate under a financial regulatory authority, these companies will adhere to a strict code of ethics lest they lose their operating license, these are the genuine companies that are trusted by traders as they do not carry out unshady trading practices against their clients because they are audited by their regulators annually

Regulated + STP Execution is the best choice to trade with.

Indices Brokers Type - Indices Brokers Types - ECN, STP, NDD, DD, Market Makers - Indices Liquidity Provider - Stock Indices Liquidity Providers