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