STP (Straight-Through Processing)
STP brokers pass client orders directly to liquidity providers without a dealing desk, reducing requotes and conflicts.
STP brokers pass orders straight to liquidity providers with no dealing desk in the middle. It means fewer requotes and no internal counterparty, but not automatically the best price.
Straight-Through Processing (STP) is an execution model where the broker passes client orders directly to external liquidity providers, such as banks and other brokers, without a dealing desk in the middle. There is no internal counterparty taking the other side, so requotes are rare and the broker's incentive is cleaner. Many STP brokers still widen spreads or add a markup, so STP is a structural description, not a guarantee of the best price.
How It Works
- Orders routed to banks and other liquidity sources
- No internal dealing desk takes the other side
- Broker earns from spread markup or commission
Trading Tips
STP is one factor in execution quality - check slippage and requote reports too
Ask whether the broker's STP is true STP or marketed STP with an internal desk
Related Terms
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