What does STP broker mean? What are the conditions of a trading account with a Straight Through Processing broker and what are the main advantages and disadvantages of this way of trading and executing orders? In this section we answer these questions and present the best STP brokers today that offer the best services and trading conditions.
What are STP brokers?
An STP (straight to processing) broker is a financial intermediary that, at the moment the trader places his orders, redirects these orders directly to his own liquidity providers. In this case, the broker becomes an intermediary between its clients and the liquidity providers.
Liquidity providers can be a bank, fund, investment company or other broker and no intermediary will participate in the trade execution; In other words, the STP broker will not filter the orders through a Dealing Desk as in a market maker broker.
The non-intervention of a Dealing Desk is what makes the broker’s trading platform an STP platform.
In this case, the broker’s profit derives from the trading volume of its clients, as well as the mark-up that is added to the spread or the commission that the broker applies to all open the positions.
You can access a complete list of STP brokers online, which includes the best companies in the sector, through the following link: Directory of STP Forex Brokers
Advantages and disadvantages of STP brokers
The main advantage of trading with such an online broker is that the broker does not influence the market price of each trading instrument offered in its trading platform.
In most cases, the broker only influences the spread, where a profit margin is applied that translates into a profit for the broker with each trade.
However, the main disadvantage is that many Forex brokers that claim to be STP brokers often have a branch of the broker as their liquidity provider, or use a mixed system, i.e. a market maker system for the losers traders and a STP execution system for the winners.
Therefore, it is very important to understand exactly which order execution model a broker operates with.
The best STP brokers to trade with
Based on the analyzes of the evaluated online brokers, we highlight those that, from our point of view, are the best Forex and CFD brokers that operate with a Straight Through Processing trading system. They have been selected in view of their reliability and general trading conditions.
All the brokers listed below offer the possibility to test the proposed platforms through a demo account (the demo platform is downloaded free of charge from the broker’s website once registration is completed).
Before opening a real account, we always recommend trying the demo account in order to be sure that we choose the best broker according to our investment needs and the type of platform.
XTB is one of the best European STP brokers that we have had a chance to test. Thanks to its multiple liquidity providers, XTB is one of the intermediaries that best applies this type of execution for online trading.
It offers very competitive trading conditions like very low spreads and an excellent trading platform, called xStation, a proprietary trading platform that is available in a webtrader version (in addition to the well-known MetaTrader 4), which is especially fast and intuitive compared to other web-based trading platforms that we have tested.
To open a trading account, the minimum deposit is 100 euros, with a maximum leverage of 1:30 for retail clients and 1:200 for professional clients (European clients). For clients outside Europe, XTB offers a maximum leverage of 1:200
For those looking for a broker with many assets and that is competitive in different markets, XTB is an option to consider, as well as one of the best CFD brokers based in Europe.
In the following review you can obtain complete information about XTB and its services: XTB Broker Review
FPMarkets is a very well established Australian broker that has grown significantly in recent years and is regulated by bodies like ASIC and CySEC. However, the biggest advantage offered by this intermediary is its fast execution and narrow spreads.
FPMarkets offers STP and ECN trading conditions with direct market access, excellent conditions for traders, advantageous spreads and low trading costs, with the possibility of trading through MT4 and MT5 platforms.
Opening a trading account with FPMarkets requires a minimum deposit of AUD 100 or its equivalent in other currencies. Furthermore, unlike European Forex brokers, it offers a maximum leverage of 1:500.
For those who are looking for a high quality ECN/STP regulated broker with ultra-low spreads, FPMarkets is a reliable choice to consider.
In the following review you can obtain complete information about FPMarkets and its services: FPMarkets Broker Review
Pepperstone is one of the best online brokers in Australia and offers the possibility of trading in STP mode through a specific Straight Through Processing account on MT4, MT5 and cTrader platforms. It also offers ECN trading accounts for clients that require even lower spreads, from 0 pips onwards and other trading conditions for more experienced traders.
Pepperstone is primarily a Forex broker which also offers CFD instruments on DMA stocks, with very low spread on currencies and other financial instruments, and, unlike European brokers, it offers a high leverage and a fast execution making it one of the best STP brokers to trade with.
Opening an online trading account with the broker requires a minimum deposit of 200 USD with a maximum leverage of up to 1:500. It is an Australian ASIC regulated broker and offers protection against negative balance. In addition, client funds are kept in segregated accounts.
In the following review you can obtain complete information about Pepperstone and its services: Pepperstone Broker Review
Tickmill is one of the most competitive STP brokers when it comes to trading in the currency markets. It offers a quality and simple service with the most popular trading platforms, including Metatrader 4. It has an excellent reputation in the sector and offers the possibility of applying its own scalping trading strategies with very low spread.
It also offers the possibility of trading online in accordance with European regulatory standards (maximum leverage of 1:30) or the Seychelles (maximum leverage of 1: 500), which entails greater leverage but less protection for the trader.
Tickmill currently has several regulations, including the FCA and CySEC.
Tickmill is an excellent choice for traders primarily interested in the Forex market who are looking for a reliable Forex broker as it is very cost competitive and has a good reputation.
In the following review you can obtain complete information about Tickmill and its services: Tickmill Broker Review
ICMarkets is a well-known ECN/STP broker from Australia with thousands of clients around the world. Along with good trading conditions, it offers access to multiple markets in addition to Forex, including CFD on indices, commodities and cryptocurrencies.
This broker is characterized by transparent and advantageous trading conditions, high speed execution and high level professionalism. $200 minimum deposit, 4 trading platforms including MT4 and cTrader, two types of true ECN accounts, spreads starting at 0.0 pip with commissions starting at $3.50 per lot and a maximum leverage of 1:500 for PRO clients, are the main advantages of ICMarkets.
Based in Australia and regulated by ASIC, IC Markets is one of the best ECN brokers currently active, one of the most trusted brokers where you can choose to trade regardless of your level of experience, be it expert, intermediate or beginner.
In the following review you can obtain complete information about ICMarkets and its services: ICMarkets Broker Review