Stocks Brokers Types

Stocks Brokers Type

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

ECN

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

These ECNs trading account will charge commissions + spreads for every stocks trade. For these ECN Stock Account execution method every trade is matched to another in real time over the interbank network - ECN Network.

STP

STP Stock Account stands for STP, the STP Stock Account stocks brokers will send client 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 Stock Account provided by an STP stocks broker can either have one Stocks Trading Liquidity Provider or many liquidity providers.

The best thing about STP Stock Accounts is that stock traders can place their stock trades immediately with instant execution because they have got access to inter bank market via their STP stocks broker.

STP Stock Accounts will not charge commissions, but will charge spread on stock trades. Because traders have access to the interbank markets execution, there is no requotes on the stock orders neither any order waiting for trade execution, the order execution is instant.

Difference between STP and ECN Execution

NDD

NDD stand for Non-Dealing Desk stocks execution of orders, these NDD Stock Account stock 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 direct to the inter-bank exchange stock market. The orders will be matched with other orders in interbank stocks market using the broker Non Dealing Desk order execution model.

DD

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

The stocks trader trading with a DD account will get a lot of requotes.

Dealing Desks will issue stocks traders with a lot of order requotes, meaning stocks prices of orders are not realtime and the broker can requote a stocks trader's order if the stocks price of the stocks market changes quickly enough before the broker's dealing desk places the trading order online or before they match the order in the online interbank stocks market.

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

Market Makers

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

Stocks Trading orders can also be executed against their traders - meaning the broker can take the opposite side of a traders open trades. This stocks broker can make the decision to either execute a stocks order that's the opposite of a stocks 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.

Regulated Stocks Brokers

Regulated Stocks 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.

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