Why Traders Choose Best Commodity Trading STP Broker and The Difference Between Best Commodity Trading STP Broker and Best Commodity Trading ECN Broker
Commodity Trading STP Definition
Best Commodity Trading STP Broker or Straight Through Processing, is the name given to brokers that, when upon receiving a client order they will pass on the commodity orders directly to their Commodity Trading Liquidity Provider. Liquidity providers can include Banks and as such there is no inter-mediary involved in order processing in other words the STP does not filter the commodity orders through a Dealing Desk. Absence of a Dealing Desk intervention is what makes this electronic platform a Straight Through Processing.
With absence of an inter-mediary process (dealing desk) the Best Commodity Trading STP Broker, Straight Through Process execution will be able to process its clients orders instantly without any delay. This makes Best Commodity Trading STP Brokers the most recommended commodity broker type. The Straight Through Processing Brokers will also not send re-quotes to its clients something that most investors regard as very important. Straight Through Process execution will also in effect will allow its clients to trade during the release of financial news without any restrictions.
Straight Through Processingcommodity brokers benefit from having several liquidity providers and an increase in the number of providers in the system means better fills for the client. A large number of Best Commodity Trading STP Brokers will use banks trading on the inter bank market as their liquidity providers.
Before Reading Spot the difference between these two headings so that the headings below do not seem like a repetition.
- Reasons why Brokers select Straight Through Process execution
- Reasons why Traders Select Straight Through Process execution
Reasons why Commodity Trading Brokers choose to be Best Commodity Trading STP Broker
In addition to the fact that most traders prefer Straight Through Processing due to the fact that a client's losses aren't a broker's profit. It is therefore in the broker's interest for the trader to make profitable trades, a STP execution model often implies that there is No Dealing Desk (NDD) and subsequently has less expenses through its staff salaries.
An Best Commodity Trading STP Broker is compensated through a markup on the spread it obtains from its Commodity Trading Liquidity Provider &/or commissions imposed for each trade. As most liquidity providers of Straight Through Processing execution are banks on the Inter bank market, the majority of which offer fixed spread this allows the Straight Through Processing Brokers to provide both fixed & variable spreads to its clients.
Each time a client trades through a Straight Through Processing platform, the Best Commodity Trading STP Broker will always make a profit. As Straight Through Processing add a small markup to the spread they receive from their provider when getting quoting of bid/ask rate. The Best Commodity Trading STP Broker will apply this markup by a certain amount of fractional pips to the bid and ask commodity price that it receives from its best bid/ask Commodity Trading Liquidity Provider before passing the rates on to the client via the straight through processing electronic platform.
As the client places the trading order through the STP platform, the commodity orders are then sent directly to the Commodity Trading Liquidity Provider and as such the Best Commodity Trading STP Broker executes the same orders as the client at a slightly better commodity price which is the markup.
Reasons why Commodities Traders Select Straight Through Processing Brokers
Clients often choose to execute trades via an Best Commodity Trading STP Broker as it often implies there is no Dealing Desk, which in turn means that the broker is more transparent with their clients.
The Traders enter trades into a true market instead of an artificial market that may be created by a market maker. Client trades obtain better and faster fills through an Best Commodity Trading STP Broker.
The better and faster fills are obtained directly from the many competitive market bids & offers coming through STP liquidity providers, which provide for more liquidity within commodities trading market & in turn this implies lower execution commodity prices for the client.
Client transactions with an Best Commodity Trading STP Broker means there is anonymity for the client as there is no Dealing Desk monitoring the transactions of orders coming in from each client. The Commodity Trading orders are instead executed automatically through the commodities trading market network anonymously.
Another Type of Online Commodity Trading Broker is Best Commodity Trading ECN Broker
What's an Best Commodity Trading ECN Broker?
Electronic Communications Network- Best Commodity Trading ECN Broker provide traders with real time data quotes straight from the network of banks that trade Commodity Trading - The Interbank market. Since these Best Commodity Trading ECN Brokers offer real time data commodity trading quote from these network via their own Electronic Communication Network which connects directly to the Interbank network of banks, they are known as Best Commodity Trading ECN Broker technology brokers, short form is Best Commodity Trading ECN Broker.
Best Commodity Trading ECN Broker will show the entire bid and ask offers currently available in the commodities trading market from banks. An Best Commodity Trading ECN Broker will allow traders to place their commodity orders straight through to the commodities trading market. Liquidity isn't provided by the broker but by this inter-bank net-work of banks. This way commodity traders trading through an Electronic Communication Network gets high liquidity & execute trades very quickly & instantly without getting re quoted.
Most Traders ask which is the best between the Best Commodity Trading STP Broker and the Best Commodity Trading ECN Broker? & What is the difference between these two?
Best Commodity Trading STP Broker
Has multiple liquidity providers, but selects the best at any one time automatically for the trader. Therefore when a trader places a trade the commodity orders will be passed direct to this interbank.
Therefore Best Commodity Trading STP Broker is like Best Commodity Trading ECN Broker the only difference is that the Straight Through Processing Brokers automatically chooses the best one at that particular time and does it automatically for the trader.
Best Commodity Trading ECN Broker
Has many liquidity providers from which a trader will see all at same time and choose which to trade, It is like having 10 commodity brokers to choose from which to trade.
The Best Commodity Trading ECN Broker a trader will have to look at many streaming quotes at the same time and select one, this streaming commodity trading quote will have varying spreads & a trader chooses the low spread.
There is no much difference between Best Commodity Trading ECN Broker and Best Commodity Trading STP Broker, that is why some traders or some brokers will use the term interchangeably, because the only difference between Straight Through Process execution from the Electronic Communication Network execution is that the Best Commodity Trading STP Broker only chooses to have only one Commodity Trading Liquidity Provider while Best Commodity Trading ECN Broker implements a wide variety of liquidity providers and it is up to the trader to select which Commodity Trading Liquidity Provider to choose from while trading.
According to reviews, these brokers are also have the low spreads, therefore if you are looking for the low spreads it is good to choose an Best Commodity Trading STP Broker.
Most online commodity brokers do not want to clutter the traders workspace with multiple commodity trading streaming commodity quote from various different places which may confuse the trader, especially the novice commodity traders who do not know what is what, that's why most commodity brokers might be Best Commodity Trading ECN Broker but only choose to display only one streaming quotes from only one interbank, therefore becoming more of an Best Commodity Trading STP Broker rather than an Best Commodity Trading ECN Broker, but the model of operation is basically one and the same.
If you were to open a commodity trading account with an Best Commodity Trading ECN Broker you would get like 10 quotes of Commodity Trading from different banks and to trade you would have to chose the commodity trading quote from one of these banks. 10 commodity price quotes for commodity would make your commodity trading platform workspace too crowded (An Best Commodity Trading ECN Broker Lists Spreads from many liquidity providers). Another thing is that you would need a more complex commodity software to stream these multiple commodity price quotes, this type of platform would not make the best platform to trade with. Furthermore if you open an Best Commodity Trading ECN Broker account you will have to pay additional commissions on top of spreads. This is also another reason why to choose Best Commodity Trading STP Broker since unlike Best Commodity Trading ECN Broker, Best Commodity Trading STP Broker do not charge commissions. This means that the Best Commodity Trading ECN Broker isn't the cheapest execution method & will charge traders extra commissions adding onto your transaction costs.
Best Commodity Trading STP Brokers offer the best liquidity conditions for clients to make trades
Best Commodity Trading STP Brokers do not have a dealing desk and therefore this provides for full trade transparency, faster and better order fills. The full transparency means this type of commodity broker does not create an artificial market for clients, but instead shows a trader the realtime data commodity quote from an electronic network of banks and allows the trader to enter the true market conditions created by the various commodity market participants.
Straight Through Processing - is name given to brokers that: upon receiving of a client order they will pass on the commodity orders directly to the network of banks and as such there is no intermediary who will be involved in order execution in other words Straight Through Processing Execution won't be filtering orders through a Dealing Desk. The absence of a Dealing Desk is what makes the electronic communication network the best choice for many traders.
With absence of such an intermediary process such as a commodity trading dealing desk the Best Commodity Trading STP Broker is able to process its clients commodity orders without any delay. In addition these brokers don't send re-quotes to their clients something that most Commodity Trading traders regard as a huge advantage.
This also enables the Straight Through Processing Brokerages to allow its clients to trade during the release times of financial news without any restrictions. Other online brokers might not have the liquidity of an Best Commodity Trading STP Broker and might in turn lock out trading for a few minutes before and after a news release.
Commodity Trading Straight Through Processing Brokers provide the best 24-hour execution and access to order execution due to high internal liquidity rate and reliable interbank partners they have.
Difference Between STP and ECN - Commodity Trading ECN Meaning - Commodity Trading STP Meaning
