An STP (Straight Through Processing) broker is a type of brokerage that facilitates the direct transmission of orders to liquidity providers without any intermediary handling. This model allows for faster execution of trades and is designed to minimize latency. STP brokers typically aggregate prices from multiple sources, providing traders with a competitive spread. In many markets, STP brokers are seen as more transparent, as they often do not take the opposite side of a client's trade. Instead, they earn revenue through predefined spreads or commissions on trades. This business model is distinct from market-making brokers, which may engage in practices where trades are executed against the broker's own inventory, potentially introducing conflicts of interest.
Trading Infrastructure