those which prevail in their real money accounts. With ECN broker traders can see where the liquidity is and execute trades. Most banks, in fact, offer fixed spreads and are market makers. Additionally, ECN brokers tend to require higher minimum trade sizes in these kinds of non-Forex instruments. This means that all small orders placed by traders (usually those which are below.1 lot) cannot be sent to the liquidity providers, because they won't be accepted; and therefore such orders should be handled by the STP broker, who in this case becomes.
A true ECN broker is simply defined as a broker that plugs your orders into a network where it is automatically matched to a matching order from another client or liquidity provider. However, spreads can widen dramatically and can sometimes be beyond what market maker brokers will be offering at the same time.
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All client orders are directly routed to the liquidity providers at original spread"d by those providers while an STP broker earns its money from own markups. If a broker is at least trying to match orders directly, there is not much of a conflict of interest, potential or otherwise. Many STP brokers run a hybrid STP model: DD NDD Every STP broker signs a business contract korea bitcoin atm with its liquidity providers (prime brokers where the contract terms regulate the minimum transactions level which will be accepted by the liquidity provider. Choice of Instruments as ECN brokers need to be sure they are truly plugged into a markets liquidity before they can credibly offer trading in that market instrument, market making brokers are often better situated to offer a wider choice of instruments, especially in individual. Since STP brokers (as well as ECN) don't trade against their clients, they add own small markups to the spread". Spreads will of course vary a lot as they are based more precisely upon market supply and demand. If not, though, this is a very big issue. Transparency means that a trader enters a true market instead of the market being artificially created for him. ECN brokers are not making money on bid/ask (spread) difference.
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