Stp
Family V · Platforms
Not to be confused with ecn, stp broker.
STP describes how an order is handled after it is submitted, not a specific venue or account type. In an STP setup, the broker transmits the order to one or more external liquidity providers, and the client's fill comes from that external market rather than from a price the broker sets internally. The term is used across forex, CFDs and exchange-traded markets, and its practical meaning depends on the broker's disclosed execution policy.
How STP execution works
When a client submits an order, an STP broker passes it to a liquidity provider such as a bank, non-bank market maker or aggregator. The broker may act as an intermediary for routing and settlement, but it does not take the opposite side of the trade with its own book. Because the broker is not the counterparty, its revenue typically comes from a markup on the spread, a commission, or both, rather than from client losses.
Execution quality in an STP model depends on the depth and pricing of the connected liquidity providers. Slippage, requotes and fill speed vary by provider, order size and market conditions, and are not fixed by the STP label itself.
Worked example: spread markup
An STP broker receives a raw interbank quote and adds a fixed markup before showing it to the client. The client buys at the marked-up ask, and the broker keeps the difference.
The broker's revenue is the markup, not a gain from the client's position. If the client sells at 1.08500 and the raw bid is 1.08498, the same markup applies on the other side.
What STP does not guarantee
STP is an execution label, not a promise of best execution, zero conflict of interest or regulatory protection. A broker using STP routing can still hold a B-book for some order flow, and the proportion of orders routed straight through varies by firm and is often disclosed only in the execution policy. Whether a broker is permitted to describe itself as STP, and what it must disclose, depends on the regulator and jurisdiction.
Often confused with
- ecn
- An ECN matches client orders against other participants in a electronic network, so the broker may earn commission on a spread it does not mark up, whereas STP routes orders to external liquidity providers and commonly earns from a spread markup; the visible sign is whether the account is priced with raw spreads plus a separate commission or with a single marked-up spread.
- stp broker
- An STP broker is the firm operating the straight-through model, while STP is the routing mechanism itself, so the broker is the entity and STP is the process; the visible sign is that 'STP broker' names a company or account type, whereas 'STP' describes how orders are transmitted.