What is Difference Between ECN and STP Commodities Trading Account in Commodities?
ECN Commodities Trading Account vs STP Commodities Trading Account
ECN Commodities Trading Accounts
ECN Commodities Account stands for Electronic Communication Net-work, these ECN Commodities Trading Account commodity brokers are connected to the inter-bank network directly through an electronic communication network and the commodity orders from the ECN Commodities Trading Account are placed straight to the electronic network.
The ECN Commodities Account will display different orders from different banks. The commodity quote placed by these ECNs net-work of banks are direct from them to the inter bank network and orders are executed directly to the interbank market once a trader trading with this ECN account places an order with their commodity broker.
These ECNs trading account will charge commissions + spreads for every commodity trade. For these ECN Commodities Account execution technique every trade is matched to another in real time over the inter-bank network - ECN Network.
STP Commodities Trading Accounts
STP Commodities Trading Account stands for Straight Through Processing, STP Commodities Trading Account commodity brokers will send client orders direct to their Commodities Liquidity Provider, the Commodities Liquidity Provider is a big bank with deep liquidity to trade on the interbank net-work.
An STP Commodities Trading Account provided by an STP commodity broker can either have one Commodities Liquidity Provider or many liquidity providers.
The best thing about STP Commodities Trading Accounts is that commodities traders can place their commodities trades immediately with instant market execution because they have access to the interbank market via their STP commodity broker.
STP Commodities Trading Accounts will not charge commissions, but will charge spread on commodities trades. Because Commodities traders have access to the inter bank markets trading execution, there is no re-quotes on the commodity orders neither any trading order waiting for trade execution, the order execution is instant.
