ECN, STP, NDD, DD and Market Maker

CFD Trading Liquidity Providers

List below shows the different categories of cfd brokers classified depending on their execution technique.

ECN

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

These ECNs account will charge commissions + spreads for every cfd trade. For these ECN CFDs Account execution technique every trade is matched to another in real time over the interbank network - ECN Network.

STP

STP CFDs Account stands for STP, the STP CFDs Account cfd brokers will send client orders direct to their CFD Trading Liquidity Provider, the CFD Trading Liquidity Provider is a big bank with deep liquidity that's required to trade on the inter-bank net-work.

An STP CFDs Account provided by an STP cfd broker can either have one CFD Trading Liquidity Provider or many liquidity providers.

The best thing about STP CFDs Accounts is that cfds traders can place their cfds trades immediately with instant execution because they have access to the inter bank markets via their STP cfd trading broker.

STP CFDs Accounts will not charge commissions, but will charge spreads on cfds trades. Because traders have access to the inter-bank markets execution, there is no re quotes on the cfd orders neither any order waiting for execution, order execution is instant.

Difference between STP and ECN Execution

NDD

NDD stand for Non-Dealing Desk cfd execution of orders, these NDD CFDs Account cfds brokers do not implement a dealing desk this makes this type of trade 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 direct to inter-bank exchange cfds trading market. The orders will be matched with other orders in inter-bank cfd market using the broker Non Dealing Desk order execution model.

DD

DD stands for dealing desk, these DD account cfd brokers have a dealing desk model where they can match orders & execute cfd order in the online interbank cfd trading market.

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

Dealing Desks will issue cfd traders with a lot of order requotes, meaning cfd prices of orders aren't realtime and the broker can requote a cfd trader's order if the cfd price of the cfd market changes quickly enough before the broker's dealing-desk places the order online or before they match the order in online inter-bank cfd trading market.

Dealing Desk accounts therefore means that order execution of cfd orders is not instant & therefore this execution model may mean that orders executed using a DD CFDs Account are not executed as quickly as when compared to an ECN account or an STP account.

Market Makers

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

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

Regulated CFD Brokers

Regulated CFD 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.

CFD Brokers Type - CFD Brokers Types - ECN, STP, NDD, DD, Market Makers - CFD Trading Liquidity Provider - CFD Trading Liquidity Providers