Types of Commodities Trading Brokers
Non Dealing Desk Broker, DD
Different Types of Commodity Trading Brokers List - below is an explanation of the Different Types of Commodity Trading Brokers.
ECN - Electronic Communication Network Broker - Types of Commodities Trading Brokers
ECN Broker stands for Electronic Communication Network, these ECN commodity brokers are connected to the interbank network directly through an electronic communication network & the commodity orders from the ECN Commodity Trading Broker are placed straight to the electronic network. The ECN Broker will display different commodity quotes from different liquidity providers. The quotes placed by these ECNs network of liquidity providers are direct from the interbank network and commodity orders are executed directly in the interbank commodity market - once a trader trading with an ECN broker places a commodity order with their commodities trading broker.
These ECN brokers will charge commissions + spread for every commodity trade transaction order. For these ECN Broker execution technique every commodity trade is matched to another in real time over the interbank network - ECN Network.
STP - Straight Through Processing Broker - Types of Commodities Trading Brokers
STP Broker stands for STP, the STP commodity brokers will send client trading 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 Broker can either have one commodity liquidity provider or many liquidity providers.
The best thing about STP Commodity Trading Brokers is that commodities traders can place their commodities trades immediately on the online commodity market with instant execution because they have access to the interbank market through their STP commodity broker.
STP Commodity Trading Brokers will not charge commissions, but will charge spreads on commodities trades. Because commodity traders have access to the inter bank markets trading execution, there is no re-quotes on the commodity orders neither is there any commodity order waiting for execution, the order execution is instant.
NDD - Non Dealing Desk Broker - Types of Commodities Trading Brokers
NDD stand for Non-Dealing Desk commodity execution of orders, these NDD commodity brokers do not implement a dealing desk & this makes this type of order execution to have less trading restrictions as opposed to the Dealing Desk Commodity Trade Execution.
NDD Execution means that commodities trades from the traders account will be executed directly to the interbank exchange commodities market. The commodity orders will be matched with other trading commodity orders in the interbank exchange market using the broker Non Dealing Desk trade order execution model.
DD - Dealing Desk Broker - Types of Commodities Trading Brokers
DD stands for dealing desk, these DD commodity brokers have a dealing-desk where they can match commodity orders & execute commodity orders in online inter bank exchange market.
The commodity trader trading with a DD broker will get a lot of requotes.
Dealing Desks will issue commodity traders with a lot of order re quotes, meaning commodity prices of commodity 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 order online or before they match the commodity trading order in the online interbank commodity market.
Dealing Desk commodity brokers therefore means that order execution of commodity orders is not instant and therefore this commodity execution model may mean that commodity orders executed using a DD Broker are not executed as quickly as when compared to an ECN broker or an STP broker.
Market Maker Broker - Types of Commodities Trading Brokers
Market Maker are commodity brokers that have a dealing-desk where they can match commodity orders in house without going to the online interbank exchange market.
Commodity Trading orders can also be executed against their commodity traders - meaning the broker can take the opposite side of a traders open commodities trades. This commodity broker can make the decision to either execute a commodity order that is the opposite direction of a 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.
