What does STP broker mean? What are the conditions of a trading account with a Straight Through Processing broker and what are the pros and cons of this kind of execution? Here are the answers and the list of the best STP brokers to make it easier to choose where to trade online with this operating mode.
STP broker: what does it mean?
A straight through processing ( STP ) broker is a broker who, upon receipt of the client’s order, forwards it directly to their liquidity provider. In this case, the broker becomes the intermediary.
Liquidity providers can be a bank, fund, investment company or other broker and as such no intermediary will be involved in the order – in other words the STP broker won’t filter orders through a dealing desk .
The absence of a Dealing Desk intervention is what makes the broker’s trading platform an STP platform.
The broker’s profit in this case is generated by the volumes that are moved by the trader, therefore by the mark-up on the spread or by the commission applied by the broker for opening positions.
Advantages and disadvantages of STP brokers
The main advantage of operating with a web broker of this type is the fact that the market price of the individual instruments isn’t influenced by the broker itself.
In most cases, the only influence made by the broker is on the spread, where a mark-up is applied, which translates into a profit for the broker with each trade.
The main disadvantage is that many of the brokers who claim to be STP, many times have a branch of their broker as their liquidity provider, or use a mixed system , i.e. market maker for the losers, STP for the winners.
It is therefore vital to understand exactly which order execution model a broker operates with.
- Fast execution
- Prices in line with the regulated market
- Fewer conflicts of interest
- Market Maker risk in disguise
- Requotes in times of high volatility
The best STP brokers to trade
Based on the reviews of the tested online brokers, we report those that we believe are the best forex and CFD brokers operating in Straight Through Processing mode, chosen from a point of view of reliability and general trading conditions.
All reported brokers offer the opportunity to test the platforms offered through a demo account (the demo platform can be downloaded for free from the broker’s website after registration). Before opening a live account, we always recommend trying the demo account to make sure you choose the best broker based on your investment needs and platform type.
FP Markets is among the most competitive STP brokers to operate on the forex and equity market, enjoys an excellent reputation in the industry and offers very low spreads on around 10,000 financial products.
Scalping and hedging allowed, it’s ASIC and CySEC regulated, and offers 2 types of accounts with variable spreads, the standard account, with spreads starting from 1.0 pips and the RAW account, with spreads starting from 0.0 pips and a commission of 3 USD , both with maximum leverage of 1: 500 and MetaTrader 4 and MetaTrader 5 platforms.
For those who want to invest in the stock exchange , it offers an excellent platform optimized for these instruments, the Iress Trader, with access to many world exchanges and good general conditions.
Admiral Markets is a worldwide established broker that provides the possibility to choose between different types of accounts and under which regulation to work , in fact it offers the possibility to choose between FCA, ASIC, CYSEC and EFSA.
Admiral Markets offers both STP and ECN trading conditions with direct access to the market, excellent economic conditions, advantageous spreads and low trading costs, with the possibility of operating through the MT4 and MT5 platforms.
To open a trading account with Admiral Markets a minimum deposit of € 100 is required , the maximum leverage is 1:30 for private clients and differing types of accounts are available with very good spreads starting from 0.0 pips for ECN accounts and 0.5 for STP accounts.
For those looking for a multi-regulated broker, Admiral Markets is a reliable broker to consider.
XTB is one of the best European STP brokers we’ve had the opportunity to test. Given their multiple liquidity providers, XTB is one of the brokers who best apply this type of execution for online trading.
It offers very competitive trading conditions and an excellent trading platform, the proprietary xStation available in a web trader version, which is particularly fast and intuitive compared to the average of the online based platforms we tested.
There is no minimum deposit required to open a trading account, while the maximum leverage is 1:30 for private clients and 1: 200 for professional clients.
For those looking for a broker with many assets and competitive on different markets, XTB is a option to consider, as well as one of the best CFD brokers based in Europe.
Pepperstone is one of the best Australian brokers and offers the possibility of operating in STP mode through a particular type of Straight Through Processing account on the MT4, MT5 and cTrader platforms.
Pepperstone is primarily a forex broker, with very low spreads on currencies and various financial instruments, moreover, unlike European brokers, it offers high leverage, a condition that makes it one of the best STP brokers to operate on.
Opening an online trading account with the broker requires a minimum deposit of € 200 , with a maximum leverage of up to 1:30 or 1: 500 for professional traders, the account includes negative balance protection and a minimum operating margin of 50.
eToro is the leading broker in social trading and well known worldwide. It offers the solution of an STP trading account which combined with copytrading , the broker’s real strength, can be an optimal solution for those who are unable to use trading strategies independently or for those who want to rely on the experience of traders navigated by which strategies to replicate.
eToro has a minimum deposit of € 200 , a maximum leverage of up to 1:30 and the useful possibility of using small sizes , a condition that makes it a suitable choice for investors with little experience and the most suitable choice among social trading brokers.