Crude Oil Trading Brokers Types

Oil Trading Brokers Types

List below shows the different categories of oil brokers classified depending on their execution technique.

ECN

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

These ECNs trading account will charge commissions + spreads for every oil trade. For these ECN Crude Oil Account execution technique every trade is matched to another in real time over the inter-bank network - ECN Network.

STP

STP Crude Oil Account stands for STP, the STP Crude Oil Trading Account oil brokers will send client orders direct to their Oil Trading Liquidity Provider, the Oil Trading Liquidity Provider is a large bank with deep liquidity to trade on the inter-bank net-work.

An STP Crude Oil Trading Account provided by an STP crude oil broker can either have one Oil Trading Liquidity Provider or many liquidity providers.

The best thing about STP Crude Oil Trading Accounts is that crude oil traders can place their crude oil trades immediately with instant market execution because they have access to interbank markets via their STP crude oil broker.

STP Crude Oil Trading Accounts will not charge commissions, but will charge spreads on crude oil trades. Because Oil traders have access to the inter bank markets trading execution, there is no requotes on the oil orders neither any order waiting for execution, the trading order execution is instant.

Difference between STP and ECN Execution

NDD

NDD stand for Non-Dealing Desk oil trading execution of orders, these NDD Crude Oil Trading Account crude oil 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 online inter bank exchange crude oil market. The orders will be matched with other orders in online oil market using the broker Non Dealing Desk order execution model.

DD

DD stands for dealing desk, these DD account oil brokers have a dealing-desk where they can match orders and execute oil trading order in the online oil market.

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

Dealing Desks will issue oil traders with a lot of order re quotes, meaning oil prices of orders aren't real-time & crude oil broker can requote a oil trader's order if the crude oil price of the crude oil market changes quickly enough before the broker's dealing desk places the order online or before they match the order in the online oil market.

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

Market Makers

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

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

Regulated Oil Trading Brokers

Regulated Oil 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 practices against their clients because they are audited by their regulators annually

Regulated + STP Execution is the best choice to trade with.

Oil Trading Brokers Type - Oil Trading Brokers Types - ECN, STP, NDD, DD, Market Makers - Oil Trading Liquidity Provider - Crude Oil Trading Liquidity Providers