STP broker explained: straight-through processing in forex
By Ken Chigbo, Founder, KenMacro. Published 2026-05-12.
Quick answer
An STP broker (straight-through processing broker) routes every retail client order directly to one or several wholesale liquidity providers without internal dealing-desk intervention. Spreads are typically a small markup on the underlying provider quote. STP differs from ECN in that orders are not matched against other client flow in an aggregated pool, but passed in sequence to upstream providers.
Quick answer
An STP broker (straight-through processing broker) routes every retail client order directly to one or several wholesale liquidity providers without internal dealing-desk intervention. Spreads are typically a small markup on the underlying provider quote. STP differs from ECN in that orders are not matched against other client flow in an aggregated pool, but passed in sequence to upstream providers.
What is STP broker?
An STP broker is a no-dealing-desk broker that pushes each client order straight through to a wholesale liquidity provider, typically a bank or a prime broker. The broker does not take the other side of the trade. Revenue comes from a small markup on the spread the upstream provider quotes, often a fraction of a pip on FX majors. The model sits between the dealing-desk market maker (which internalises the trade) and the ECN (which matches against aggregated multi-party flow). On thin-margin majors like EUR/USD, an STP broker may show typical spreads of 0.6 to 1.2 pips during liquid hours.
How traders use STP broker
Traders who want clean order conduct without paying explicit per-lot commission often prefer STP. The all-in cost is built into the spread, which simplifies P&L tracking on a small account. STP works well for swing traders and position traders holding for hours to days, where a slightly wider spread is amortised over a larger move. STP is less suited to scalping the inside spread of EUR/USD, where ECN raw-spread plus commission typically beats STP marked-up spread on total cost. The desk’s broker reviews document each STP broker’s typical spread, the depth of its liquidity provider stack, and its conduct on news prints. Withdrawal speed and regulatory tier round out the picture.
ASIC regulated. Raw-spread ECN execution. Built for active intraday forex and index traders who care about cost per round-turn.
Common misconceptions about STP brokers
The first misconception is that STP automatically means cheap; STP markup on majors can match or exceed a market-maker fixed spread depending on the venue. The second is that STP and ECN are synonymous; they share the no-dealing-desk principle but differ in routing mechanics, with ECN aggregating multi-party flow and STP routing in sequence to one or several upstream providers. The third is that STP eliminates re-quotes entirely; under thin liquidity or during news prints, an STP broker can still pass back a re-quote or experience slippage to the next available provider quote.
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Frequently asked
What is the difference between STP and ECN?
STP (straight-through processing) routes each client order in sequence to one or several upstream liquidity providers. ECN (electronic communications network) routes orders into an aggregated matching pool where bids and offers from many providers compete. ECN typically shows tighter raw spreads with a per-lot commission. STP typically shows a slightly wider all-in spread.
Are STP brokers safer than market makers?
Counterparty risk on an STP broker is structurally lower than on a pure dealing-desk market maker because the STP broker does not profit when the client loses. However, regulatory tier matters more than execution model for client-fund safety. A Tier-1 regulated market maker is safer than an unregulated STP venue.
Do STP brokers charge commission?
Pure STP brokers typically do not charge a separate per-lot commission. Revenue comes from a small spread markup on the upstream provider quote. Hybrid STP/ECN accounts may charge commission for raw-spread tiers and no commission for standard-spread tiers, with the same routing mechanics underneath.
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