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STP Broker: Definition, Characteristics, and Advantages


A Straight Through Processing (STP) broker is a forex brokerage firm that provides wholesale forex services orders to institutional traders. The STP broker was built from the exchange between the two world-choices of retail customer service and high-quality trading institutions. These brokers must provide a full spectrum of professional staff for investment, analysis, marketing, and communications support, all under one roof. 

Let’s look at the different characteristics and advantages of an STP broker below.

What are the Characteristics of an STP Broker?

An STP broker typically offers multiple financial instruments, spreads, and sizes. The main characteristics of an STP broker include:

Suppose a buyer’s quote is higher than their offer. For example, there would be no need for active bids due to automated features trading between brokers or institutional orders according to their internal instructions (for buy only, sell up, etc.) [2]

Advantages of an STP Broker

Additionally, an STP broker generally has better pricing because they are not paying a commission on every trade. They only pay when trading is profitable, and if they lose money, there is no charge at all.

Final Word

An STP broker has many advantages over other trading platforms, and the main advantage is that STP brokers can get better pricing when compared to an ATS or even IB. In addition, STP brokers do not have to pay commissions on every trade, except where trades are profitable. This is why many traders prefer STP brokers over other platforms.

Start Trading with Vantage

Access markets including forex, commodities, indices, shares/stocks and more, at low cost. Start trading by opening a live account here, or practice trading with virtual currency with a demo account.

You can also sign up for our free, weekly webinars that will break down the current markets as well as discuss potential trade set ups for the week.

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