ECN and STP
ECN and STP are models in which a broker routes your order to the outside market instead of taking the other side. ECN matches orders in a shared network; STP passes them to liquidity providers.
How it works
There are two main broker types. A market maker (dealing desk) becomes the other side of your trade, so your loss can be its profit. No dealing desk (NDD) brokers pass orders on to banks and other liquidity providers.
STP (straight through processing) means your order is automatically sent to one or more liquidity providers, and the broker earns a markup on the spread. ECN (electronic communication network) means your order enters a network where bids and offers from banks, funds and other traders meet; spreads are usually very tight, but there is a separate commission per lot.
In practice the line is blurry: many brokers run hybrid models, and ECN and STP are often just marketing words. So do not trust the label, look at the numbers: total cost per trade, execution speed, slippage and the broker's regulation.
Broker A: EUR/USD spread of 0.1 pip plus a $7 round-turn commission per standard lot. Broker B: 1.2 pip spread with no commission. A pip on a standard lot is worth $10. A costs 0.1 × $10 + $7 = $8 per trade, B costs 1.2 × $10 = $12. Compare this way, at the same time of day.
Do not pick a broker just because an ad says ECN. Check the licence and regulator, real spreads during news, commissions, slippage and what people say about withdrawals. An honest, well-regulated market maker can be safer than a dubious ECN.
Questions and answers
What are ECN and STP in simple terms?
They are ways a broker sends your trade to the outside market instead of trading against you: into a shared order network (ECN) or to large liquidity providers (STP).
What is the difference between ECN and STP?
ECN usually has the tightest spreads plus a per-lot commission, and orders meet in a shared pool. STP often has no commission, but the broker adds a markup to the spread.
Is an ECN account better than a standard one?
Not automatically. It is better if the total cost per trade (spread plus commission) is lower and execution is fair. Do the math and check the broker's regulation.
Related terms
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Updated: 2026-10-19