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What is the Difference Between Straight Through Processing and Dealing Desk Account in Indices Trading?

STP Indices Trading Account vs DD Indices Trading Account


STP Indices Trading Accounts


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


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


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


STP Indices Trading Accounts will not charge commissions, but will charge spreads on stock indexes trades. Because Indices traders have access to the interbank market execution, there is no requotes on the indices orders neither any order waiting for execution, the execution is instant.



DD Indices Trading Accounts


DD stands for dealing desk, these DD account indices brokers have a dealing desk where they can match orders and execute indices trading order in the online stock indexes market.


The indices trader trading with a DD account will get a lot of requotes.


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


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

 

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