ECN, STP, NDD, DD and Market Maker

Commodity Trading Liquidity Provider

The list below shows the different categories of commodity brokers classified depending on their execution technique.

ECN

ECN Commodities Trading Account stands for Electronic Communication Net-work, these ECN Commodities Trading Account commodity brokers are connected to the interbank network directly through an electronic communication network & the commodity orders from the ECN Commodities Trading Account are placed straight to the electronic network. ECN Commodities Trading Account will display different orders from different banks. Commodity trading quote placed by these ECNs network of banks are direct from the to the inter bank network & orders are executed directly to the inter bank market once a trader trading with this ECN account places an order with their commodity broker,

These ECNs trading account will charge commissions + spreads for every commodity trade. For these ECN Commodities Account execution technique every trade is matched to another in realtime over the inter bank network - ECN Network.

STP

STP Commodities Trading Account stands for STP, the STP Commodities Trading Account commodity brokers will send client orders direct to their Commodity Trading Liquidity Provider, the Commodity Trading Liquidity Provider is a large bank with deep liquidity that's required to trade on the interbank network.

An STP Commodities Trading Account provided by an STP commodities trading broker can either have one Commodity Trading Liquidity Provider or many liquidity providers.

The best thing about STP Commodities Trading Accounts is that commodities traders can place their commodities trades immediately with instant execution because they have access to inter bank market via their STP commodities trading broker.

STP Commodities Accounts will not charge commissions, but will charge spread on commodities trades. Because traders have access to interbank market execution, there is no requotes on the commodities orders neither any order waiting for trade execution, the order execution is instant.

Difference between STP and ECN Execution

NDD

NDD stand for Non-Dealing Desk commodity trading execution of orders, these NDD Commodities Trading Account brokers do not implement a dealing desk - this makes this type of execution model to have less trading restrictions as opposed to the Dealing Desk Execution Model.

NDD Execution means that trades from the traders account will be executed directly to the interbank exchange commodities market. Orders will be matched with other orders in the online commodity market using the broker Non Dealing Desk order execution model.

DD

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

The commodity trader trading with a DD account will get a lot of re-quotes.

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

Dealing Desk accounts therefore means that order execution of commodity orders is not instant & therefore this execution model may mean that orders executed using a DD Commodities Trading Account aren't executed as quickly as when compared to an ECN trading account or an STP account.

Market Makers

Market Maker are commodity broker accounts where Market Maker commodity brokers have a dealing-desk execution model where they can match orders in-house without going to the online commodity market.

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

Regulated Commodity Trading Brokers

Regulated Commodity Trading 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.

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