Different Types of Commodities Trading Brokers
ECN
Different Types of Commodity Trading Brokers List - below is an explanation of the Different Types of Commodities Trading Brokers.
ECN - Electronic Communication Network Commodities Broker - Types of Commodity Trading Brokers
ECN Broker stands for Electronic Communication Network, these ECN commodity brokers are connected to the inter-bank network directly through an electronic communication network and the commodity orders from the ECN Commodity Trading Broker are placed straight to the electronic network. The ECN Broker will display different commodities quotes from different liquidity providers. The quotes placed by these ECNs network of liquidity providers are direct from the interbank network and commodity orders are executed directly in the online commodity market - once a trader trading with an ECN broker places a commodity trading order with their commodity broker.
These ECN brokers will charge commissions + spread for every commodity trade transaction order. For these ECN Broker execution technique every commodity trade is matched to another in real time over the interbank network - ECN Network.
STP - Straight Through Processing Commodities Broker - Types of Commodity Trading Brokers
STP Broker stands for STP, the STP commodity brokers will send client trading orders direct to their Commodity Trading Liquidity Provider, the Commodity Trading Liquidity Provider is a big bank with deep liquidity to trade on the interbank net-work.
An STP Broker can either have one commodity trading liquidity provider or many liquidity providers.
The best thing about STP Commodity Trading Brokers is that commodities traders can place their commodities trades immediately on the online commodity market with instant execution because they have access to the interbank market through their STP commodities trading broker.
STP Commodity Trading Brokers will not charge commissions, but will charge spreads on commodities trades. Because commodity traders have access to the inter bank markets trading execution, there is no re-quotes on the commodity orders neither is there any commodity order waiting for execution, the order execution is instant.
NDD - Non Dealing Desk Commodities Broker - Types of Commodity Trading Brokers
NDD stand for Non-Dealing Desk commodity trading execution of orders, these NDD commodity brokers do not implement a dealing desk and this makes this type of order execution to have less trading restrictions as opposed to the Dealing Desk Commodities Trade Execution.
NDD Execution means that commodities trades from the traders account will be executed directly to the online inter bank exchange commodities market. The commodity orders will be matched with other commodity orders in the interbank exchange market using the broker Non Dealing Desk order execution model.
DD - What is a Dealing Desk Commodity Trading Broker? - Types of Commodity Trading Brokers
DD stands for dealing desk, these DD commodity brokers have a dealing-desk where they can match commodity orders & execute commodity orders in online inter bank exchange market.
The commodity trader trading with a DD broker will get a lot of requotes.
Dealing Desks will issue commodity traders with a lot of order re quotes, meaning commodities prices of commodity orders are not real time and the broker can requote a commodity trader's order if the commodities price of the commodity market changes quick enough before the broker's dealing desk places the order online or before they match the commodity order in the online commodities market.
Dealing Desk commodity brokers therefore means that order execution of commodity orders is not instant and therefore this commodity trading execution model may mean that commodity orders executed using a DD Broker are not executed as quickly as when compared to an ECN broker or an STP broker.
Market Maker Broker - Types of Commodity Trading Brokers
Market Maker are commodity brokers that have a dealing-desk where they can match commodity orders in house without going to the online interbank exchange market.
Commodity Trading orders can also be executed against their commodity traders - meaning the broker can take the opposite side of a commodity traders open commodities trades. This commodities trading broker can make the decision to either execute a commodity order that is the opposite direction of a commodity trader's order thus if the trader makes a loss the broker makes a profit, & if the trader makes a profit the broker makes a loss.
