What is Difference Between Electronic Communication Network and Straight Through Processing Account in Commodity Trading?

ECN Commodities Trading Account vs STP Commodities Trading Account

ECN Commodities Trading Accounts

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 Account are placed straight to the electronic network.

The 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 commodities trading 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 Commodities Trading Accounts

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.