What's Difference Between Straight Through Processing and Dealing Desk Account in Commodity Trading?

STP Commodities Trading Account vs DD Commodities Trading Account

STP Commodities Trading Accounts

STP Commodities 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 inter-bank 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 markets via their STP commodities trading broker.

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

DD Commodities Trading Accounts

DD stands for dealing desk, these DD account commodity brokers have a dealing desk execution model where they can match orders and 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 commodities broker can requote a commodity trader's order if the commodity price of the commodities 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 Account are not executed as quickly as when compared to an ECN trading account or an STP account.