STP and ECN Cryptocurrency Broker

Straight Through Processing Cryptocurrency Brokers and Electronic Communications Network Bitcoin Brokers

STP or Straight Through Processing, is the naming given to brokers that, when upon receiving a trader order they will pass on the crypto orders directly to their bitcoin liquidity provider. Cryptocurrency Liquidity providers can include Banks & as such there is no inter-mediary involved in the order processing in other words the Straight Through Processing does not filter the crypto orders through a Dealing Desk. Absence of a Dealing Desk intervention is what makes this electronic platform a Straight Through Processing(STP).

With the absence of an intermediary process (dealing desk) the STP, Straight Through Process execution will be able to process its traders orders instantly without any delay. This makes STP brokers the most recommended broker type. The Straight Through Processing Bitcoin Brokers will also not send re-quotes to its clients something that most traders regard as very important. Straight Through Process execution model will also in effect allow clients of the STP broker to trade during the release of economic news without any restrictions.

Straight Through Processingbitcoin trading brokers benefit from having several liquidity providers & this increased number of liquidity providers in their system means better order fills for the client. A large number of STP bitcoin brokers will use banks trading on the inter bank markets as their liquidity providers.

Before Reading Spot the difference between these two headings so that the 2 headings below do not seem like a repetition.

Reasons why BTCUSD Brokers select Straight Through Process execution - STP Execution Model
Reasons why Bitcoin Traders Select Straight Through Process execution - STP Execution Model

Why Bitcoin Brokers Choose STP Execution Model

In addition to the fact that most traders prefer STP bitcoin brokers due to the fact that a client's losses aren't a bitcoin brokers profit. It's therefore in the Bitcoin broker 's interest for the client to make profit when trading, STP execution often implies that there is No Dealing Desk (NDD) & subsequently the broker has less expenses through its staff salaries.

An STP Cryptocurrency Broker is compensated through a markup on the bitcoin spread it obtains from its liquidity providers and/or commissions imposed for each trade. As most liquidity providers of STP btcusd brokers are banks on the Interbank market, the majority of which offer fixed spreads this allows the STP Online Brokers to provide both fixed and/or variable spreads to its clients.

Each time a client trades through the STP platform, the STP broker will always make a profit. As STP online brokers add a small markup to the spread they receive from their liquidity provider when getting quotes of bid/ask rate. The STP Bitcoin Broker will apply this markup by a certain amount of fractional pips to the bid & ask bitcoin price that it receives from its best bid/ask liquidity provider before passing the rates onto the client through their STP electronic platform.

As the client places an order through the STP platform, the bitcoin orders are then sent directly to the liquidity provider and as such the STP broker executes the same orders as the client at a slightly better bitcoin price this is the markup.

Why Bitcoin Traders Choose STP Brokers

BTCUSD Crypto traders often choose to execute their trades through an STP online broker as it often implies there is no Dealing Desk, which in turn means that the STP bitcoin broker is more transparent with clients.

The BTCUSD Crypto traders enter trades into a true market instead of an artificial market that may be created by a market maker bitcoin broker. Client trades obtain better & faster fills through an STP execution model.

The better and faster fills are obtained directly from the many competitive bitcoin market bids and offers coming through the STP liquidity providers, which provide for more liquidity within the online interbank bitcoin market and in turn this leads to lower execution bitcoin prices for the trader.

Client bitcoin trades with an STP broker means there's anonymity for the client as there is no Dealing Desk monitoring the bitcoin trade orders coming in from each client. Bitcoin orders are instead executed automatically through the inter bank markets network anonymously.

Another Type of Online Broker is ECN Online Broker

What is an ECN Bitcoin Broker?

Electronic Communications Network- ECN bitcoin broker provide bitcoin traders with real time bitcoin price data quotes straight from the network of banks that trade Bitcoin- The Interbank Market. Since these ECN brokers offer real time bitcoin price data quotes from these inter bank network via their own Electronic Communication Network - which connects directly to the Interbank network of banks, they are known as ECN technology bitcoin brokers, short form is ECN Online Brokers.

ECN bitcoin brokers will show the entire bid and ask offers currently available in the btcusd trading market from banks. An ECN bitcoin broker will allow traders to set their bitcoin orders straight through to the btcusd trading market. Liquidity is not provided by the online broker but by this inter-bank net-work of banks. This way bitcoin traders trading bitcoin through an Electronic Communication Network gets high liquidity and executes trades very quickly and instantly without getting re quoted.

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