STP (Straight-Through Processing)
Order Types & Execution
An STP broker passes client orders straight through to its liquidity providers without a dealing desk, profiting from a small spread markup rather than client losses.
What is an STP broker?
An STP (Straight-Through Processing) broker automatically routes client orders directly to one or more external liquidity providers — banks and other large institutions — without passing them through an in-house dealing desk. This makes STP one of the two common no-dealing-desk (NDD) models, alongside ECN.
How STP brokers make money
Rather than charging a separate commission on top of a raw interbank spread (the typical ECN approach), an STP broker usually takes the raw spread it receives from its liquidity providers and adds a small markup, bundling its fee into a single, slightly wider spread. Because the broker is simply passing the order through rather than taking the other side of the trade, its profit comes from that markup and from client trading volume, not from clients losing money.
Worked example
A liquidity provider might quote EUR/USD at a raw spread of 0.2 pips. An STP broker receiving that quote could add a 0.6-pip markup, presenting the trader with a final spread of 0.8 pips and no separate commission. The trader sees one all-in cost, rather than a raw spread plus a commission line item as they typically would on an ECN account.
STP vs. ECN
Both models route orders away from an internal dealing desk, but they differ in structure: an ECN aggregates multiple liquidity providers into a shared order book with commission-based pricing, while an STP broker typically routes to one or a smaller set of providers and folds its fee into the spread. In practice, many brokers blend elements of both, so the labels are a useful starting point rather than a strict technical guarantee.
Why it matters
STP execution generally means a trader’s orders are filled at genuine market prices rather than against the broker’s own book, reducing potential conflicts of interest compared with a market-maker model. As with any execution claim, it’s worth verifying a broker’s stated STP model against its regulatory disclosures and independent execution reviews rather than taking marketing copy at face value.
Trading carries a high level of risk and may not be suitable for all investors.