Market maker or an STP Broker


Market maker or an STP Broker

And finally, to trade with a market maker or an STP Broker? It depends. Market makers constantly make both bids and ask prices. They’re at all times ready to execute transactions at quoted prices and they ensure some liquidity. Thus, the trades are quickly finalized. They always stand on opposite side of your trade – if you sell, they buy. They set the exchange rates that suit them in terms of their best interests. They charge spreads to their clients which are often fixed by them.

Due to fierce competition, the spreads are not overinflated, but at some points, they may trade against you. This doesn’t happen when you trade with STP Brokers.

Their interests are compliant with your interests since their income is based on the volume of trades effected by their clients. STP Broker directs your orders to the market. Their profit depends on spreads, but their commissions are more steady, and there is the smaller possibility of a conflict of interests. The biggest disadvantage is the slow execution of your trades. Which solution to choose?

If you have customers who are news trades, the MM option would be the best for them. If the customers prefer to trade in fast moving markets, then STP is much better.