Types of CFDs Brokers

Dealing Desk Broker and Market Maker Broker

Different Types of CFD Brokers List - below is an explanation of the Different Types of CFDs Brokers.

ECN - Electronic Communication Network Broker - Types of CFD Brokers

ECN Broker stands for Electronic Communication Network, these ECN cfd brokers are connected to the interbank network directly through an electronic communication network & the cfd orders from the ECN CFD Broker are placed straight to the electronic network. The ECN Broker will display different cfds quotes from different liquidity providers. The quotes placed by these ECNs network of liquidity providers are direct from the interbank network and cfd orders are executed directly in the online cfd market - once a trader trading with an ECN broker places a cfd trading order with their cfd broker.

These ECN brokers will charge commissions + spreads for every cfd trade transaction order. For these ECN Broker execution technique every cfd trade is matched to another in real time over the interbank network - ECN Network.

STP - Straight Through Processing Broker - Types of CFD Brokers

STP Broker stands for STP, the STP cfd brokers will send client trading 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 Broker can either have one cfd trading liquidity provider or many liquidity providers.

The best thing about STP CFD Brokers is that cfds traders can place their cfds trades immediately on the online cfd market with instant execution because they have access to the interbank market through their STP cfds trading broker.

STP CFD Brokers will not charge commissions, but will charge spreads on cfds trades. Because cfd traders have access to inter bank market execution, there is no requotes on the cfd orders neither is there any cfd order waiting for execution, the order execution is instant.

NDD - Non Dealing Desk Broker - Types of CFD Brokers

NDD stand for Non-Dealing Desk cfd trading execution of orders, these NDD cfd brokers do not implement a dealing-desk and this makes this type of order execution to have less trading restrictions as opposed to the Dealing Desk CFD Trade Execution.

NDD Execution means that cfds trades from the traders account will be executed direct to inter-bank exchange cfds market. The cfd orders will be matched with other cfd orders in the interbank exchange market using the broker Non Dealing Desk order execution model.

DD - Dealing Desk Broker - Types of CFD Brokers

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

The cfd trader trading with a DD broker will get a lot of re-quotes.

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

Dealing Desk cfd brokers therefore means that order execution of cfd orders is not instant and therefore this cfd trading execution model may mean that cfd orders executed using a DD Broker aren't executed as quickly as when compared to an ECN broker or an STP trading broker.

Market Maker Broker - Types of CFD Brokers

Market Maker are cfd brokers which have a dealing desk where they can match cfd orders in-house without going to the inter-bank exchange market.

CFD Trading orders can also be executed against their cfd traders - meaning the broker can take the opposite side of a traders open cfds trades. This cfds broker can make the decision to either execute a cfd order that is the opposite direction of a 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.