STP and ECN execution explained.
STP, straight-through processing, means your broker passes your order automatically to outside liquidity providers and usually earns by widening the spread. ECN, electronic communication network, means your order meets prices from many participants in a shared order book, usually with a raw spread plus a commission. Both are labels, so check how your broker actually routes orders.
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You click buy on 1 lot of EUR/USD, and someone has to sell it to you within a fraction of a second.
Under STP and ECN execution, that price comes from outside your broker, usually from banks or large trading firms, and your broker does not keep the risk of the trade.
The lesson on how A-book brokers earn explained why a broker might pass trades on. STP and ECN are the two names you will meet most often for that routing, and each one changes what you pay and how your orders fill.
What happens to your order under STP?
Picture a group of banks and trading firms quoting EUR/USD at 1.10000 bid and 1.10004 ask, a spread of 0.4 pip. These firms are liquidity providers: they stand ready to buy or sell at the prices they show.
An STP broker connects you to those quotes. Straight-through processing (STP) means your order travels from the platform to a liquidity provider automatically, with no dealer at the broker deciding whether to take the other side.
Most STP brokers earn by adding a markup to each price. If the broker adds 0.3 pip on each side, you see 1.09997 bid and 1.10007 ask, a spread of 1.0 pip.
A pip on one standard lot of EUR/USD, 100,000 euros, is worth $10. The 0.6 pip markup is therefore worth $6 to the broker on each 1 lot round trip, inside the $10 the full spread costs you.
Many STP brokers send orders to several providers through an aggregator, software that collects their quotes and passes on the best one. The price you see depends on which providers are in that pool and how much each one quotes.
What makes an ECN different?
Think of a shared board where banks, funds and brokers post prices they will buy or sell at, with the size at each price. An incoming order matches the best price on the other side.
An electronic communication network (ECN) is that kind of venue: a system where orders from many participants meet in one order book. The list of waiting prices and sizes is called depth of market.
Retail accounts sold as ECN usually quote a raw spread, close to the underlying market, and charge a separate commission per lot. Some platforms let you see part of the order book.
An account name does not tell you which setup is behind it. A retail account called ECN may still route orders to an aggregated pool of liquidity providers, with no order book you can see.
How does each model charge you?
Take the same 1 lot EUR/USD round trip on two accounts, with illustrative numbers. The STP account quotes the marked-up 1.0 pip spread. The ECN account quotes a raw 0.4 pip and charges $3.50 per lot on each side.
- STP spread cost: 1.0 pip × $10 = $10.00, with no commission.
- ECN spread cost: 0.4 pip × $10 = $4.00.
- ECN commission: $3.50 to open plus $3.50 to close = $7.00.
- ECN total: $4.00 + $7.00 = $11.00.
| Account | Spread cost | Commission | Total, 1 lot |
|---|---|---|---|
| STP, marked-up spread | 1.0 pip = $10.00 | $0.00 | $10.00 |
| ECN, raw spread | 0.4 pip = $4.00 | $7.00 | $11.00 |
In this example the STP account is $1 cheaper. Cut the commission to $2.50 a side and the ECN total falls to $4.00 + $5.00 = $9.00, so the ECN account becomes $1 cheaper instead.
Brokers quote commission in different ways, per side or per round trip, so check which one you are reading. The Standard vs Raw account lesson runs this comparison in more depth.
Both spreads change through the day. They usually widen around the daily rollover near 17:00 New York time and around big news releases, when providers quote smaller sizes at wider prices.
If you trade through an introducing broker, a rebate can hand back part of this cost, as explained on the Exness broker page.
How do STP and ECN orders get filled?
Both models usually use market execution: your order fills at the best price available when it arrives, which may differ from the price on your screen.
Suppose the book holds these offers to sell EUR/USD: 1 lot at 1.10004, 2 lots at 1.10006 and 5 lots at 1.10008. You send a market order to buy 3 lots.
- The first 1 lot fills at the best ask, 1.10004.
- That level is now empty, so the next 2 lots fill at 1.10006.
- Average price: (1 × 1.10004 + 2 × 1.10006) ÷ 3 = 1.100053.
- Each of those 2 lots paid 0.2 pip more, so 2 × 0.2 × $10 = $4.00 extra.
- Across 3 lots, worth $30 per pip, $4.00 is about 0.13 pip on average.
The sizes are tiny so the arithmetic stays easy. Real depth on major pairs is larger, but it can thin out fast around news, which is when orders tend to fill across several levels.
The gap between the price you expected and the price you got is slippage. It can also go your way when a better price appears first, though whether you receive it depends on the broker's execution policy.
Some liquidity providers use last look, a short window in which they can reject an order after seeing it. On an STP account that can show up as a rejected or delayed order when prices move fast.
Why do the labels sometimes mislead?
STP and ECN are descriptions a broker chooses for itself. They are generally not licence categories, so two brokers can use the same word for quite different setups.
A broker can also mix models, passing some accounts straight through and keeping others in-house. That mix is covered in A-book and B-book brokers.
Some brokers first match buy and sell orders from their own clients against each other, sending only the leftover to the market. That is internalisation, the next lesson.
No routing model guarantees a good fill. A no dealing desk broker with a thin pool of providers can fill worse than a market maker that quotes tight, steady prices.
How can you check what your broker does?
Start with the documents, then test with small trades:
- Read the order execution policy. It should say whether the broker is the other side of your trade (principal) or passes it on (agent), and how it picks where orders go.
- Look at the pricing. A raw spread with a commission points to an ECN-style account, while a wider spread with no commission usually means a markup.
- Open depth of market on the platform, if it has one, and watch whether the sizes change.
- Ask support which liquidity providers or aggregator the broker uses, and note whether the answer names any firms.
- Log the requested and filled price on a few small trades, and compare them over time.
The lesson on judging order execution shows how to read those records.
Questions fréquentes
Is ECN better than STP?
Neither label is better in itself. Compare the total cost per lot, the quality of your fills and the broker's licence, because the account name alone tells you little.
Do STP brokers trade against you?
In a pure STP setup the broker passes the risk of your trade to a liquidity provider, so it does not gain when you lose. A broker that calls itself STP can still keep some orders in-house, so read its execution policy.
Why does an ECN account charge commission?
The spread on these accounts is close to the raw market spread, so the broker earns from a fee per lot instead of a markup. Your total cost is the spread plus that fee.
Can I get slippage on an ECN account?
Yes. A market order fills at the best price available when it arrives, which can be better or worse than the price you saw.
What is a no dealing desk broker?
It is a broker whose software passes orders to outside providers, with no dealer deciding whether to take the other side. STP and ECN are both described as no dealing desk.
Continuer à apprendre
Chapitre 1How to choose a forex broker.To choose a forex broker, check four things before you deposit. Confirm the licence on the regulator's own register, work out the full cost of a trade from spread, commission and swap, test how orders are filled, and make a small withdrawal to see how payouts work. A broker that fails the licence check needs no further study.
Chapitre 1What does a forex broker actually do?A forex broker opens your trading account, streams buy and sell prices, accepts your orders and fills them, either with outside liquidity providers or by taking the other side itself. It also holds your deposit, sets aside margin while trades are open, applies leverage, charges or pays swap and closes positions at stop out.
Chapitre 1Is your forex broker regulated? How to check a licence.A regulated forex broker holds a licence from a government authority such as the UK's FCA or Australia's ASIC. To check it, find the legal company name and licence number on the broker's site, then search them on the regulator's own register and confirm the website and contact details match.
Chapitre 1Red flags of a fake or unsafe forex broker.A fake or unsafe forex broker usually shows itself in a few ways: no licence or a cloned one, promises of guaranteed profit, pressure to deposit, payments to personal or unrelated accounts, bonus terms that lock your money, and withdrawals that stall or need a fee paid first. Check the regulator's register and test a small withdrawal.
Chapitre 1Who is on the other side of your forex trade?In retail forex, the other side of your trade is usually your broker. Spot forex has no central exchange, so deals are made over the counter, and your trade is most often a cash-settled CFD with the broker. The broker may keep that risk, hedge it with a liquidity provider, or match it against other clients.
Chapitre 1How forex brokers make money.Forex brokers earn from the spread, the gap between the buy and sell price, often widened by a markup they keep. Many also charge commission per lot and add a margin to overnight swap. A broker that takes the other side of your trade can also profit when you lose.
Chapitre 1A-book and B-book brokers explained.An A-book broker passes your trade to an outside liquidity provider and earns from a markup or commission, so your win or loss does not change its income. A B-book broker takes the other side itself, so it gains when you lose and pays when you win. Many brokers use both.
Chapitre 1How A-book brokers earn, and what limits them.A pure A-book broker passes each client trade to a liquidity provider, so it earns nothing from your losses. Its income is a markup on the spread, a commission per lot, swap markups and fees. Income per lot is small after routing costs, so the broker needs high volume, and it can only offer the prices its providers quote.
Chapitre 1Internalisation: how brokers net client orders.Internalisation is when a broker offsets client buy orders against client sell orders inside its own books. Opposite trades cancel, so only the leftover net position is left to hedge or keep. This cuts the broker's outside costs and risk, while each client's contract stays with the broker, who remains the counterparty.
Chapitre 1Hybrid brokers and the C-book.A hybrid broker sends some client trades to liquidity providers (A-book) and keeps others in house, taking the other side itself (B-book). Routing usually depends on account results, trade size, style and total exposure. C-book has no fixed definition; it most often means splitting one trade, hedging part and keeping the rest.
Chapitre 1Your broker's hedging policy and why it matters.A broker's hedging policy decides whether you can hold a buy and a sell on the same pair in one account, and how much margin that pair uses. Hedging accounts keep both positions open; netting accounts close or shrink the first one. Margin on a hedged pair can be full, one leg or zero.
Chapitre 1Where your broker's prices come from.Your broker's prices start as quotes streamed by liquidity providers, mostly banks and non-bank trading firms. An aggregator keeps the highest bid and lowest ask from these streams, and the broker usually adds a markup before the price reaches your platform. Different providers, markups and timing mean two brokers can show different prices at the same moment.
Chapitre 1How to judge a broker's order execution.Good order execution means your trades fill quickly, close to the price you asked for, with few requotes or rejections. To judge it, log the requested and filled price of every market order over dozens of trades. Slippage should run in both directions, with some fills better than requested, and news-time orders kept separate.Courtiers partenaires
