STP defined
STP stands for straight-through processing. An STP broker is one that passes a client's order straight through to an external liquidity source — a bank, a non-bank market maker, an ECN or an aggregated feed — and lets that source fill it. The defining feature is what the broker does not do: it does not run a dealing desk that takes the opposite side of the trade. The broker is an intermediary and an execution router, not the client's counterparty.
Because the broker holds no position against the client, its incentives are aligned with them. It is paid through a commission per lot or a small, transparent markup added to the raw price it receives. More client volume means more revenue, regardless of whether individual clients win or lose. This is what practitioners call an A-book model, and it is the structural opposite of pure internalisation.
How STP order flow works
The workflow is automated end to end. The broker first ingests price streams from its liquidity providers and, where it uses more than one, aggregates them into a single consolidated book of best bids and offers. That composite price is streamed to the client's platform. When the client trades, the order is routed back out — automatically, with no manual dealer intervention — to the provider offering the best available price, which executes the fill and confirms it back through the chain.
Two things determine how good that experience is. The first is the quality of the underlying liquidity: how deep the book is, how tight the spread stays, and how reliably it fills size when markets move. The second is the routing and aggregation technology connecting the platform to that liquidity. A clean STP setup depends on both, which is why the model is only as strong as the liquidity and the execution layer behind it.
STP vs ECN vs DMA vs market maker
These four terms are often used loosely and sometimes interchangeably, but they describe distinct things — two of them execution models and two of them access mechanisms. The table below sets them side by side.
| Model | How it executes | Broker's role | Typical revenue |
|---|---|---|---|
| STP | Routes orders straight through to one or more liquidity providers. | Intermediary / router; takes no position against the client. | Commission or transparent markup on the underlying price. |
| ECN | Matches orders anonymously in a shared central book of competing participants. | Provides access to the network; no dealing desk. | Fixed commission per lot; raw spreads passed through. |
| DMA | Places the order directly onto a venue's order book; client sees real depth. | Provides direct access to the market; no dealing desk. | Commission; access and connectivity fees. |
| Market maker | Quotes its own prices and fills the client internally (internalisation). | Acts as the counterparty; takes the other side of the trade. | Spread and net trading result of client flow (B-book). |
Illustrative, structural comparison. Real brokers frequently combine models — for example, aggregating ECN and bilateral liquidity into a single STP feed.
STP vs ECN
Both are non-dealing-desk models, so both avoid the conflict of a broker trading against its clients. The difference is where the price comes from. An ECN routes orders into a single shared venue where many participants post competing bids and offers and trades match anonymously against that central book. An STP broker instead routes to its own set of liquidity providers, which may quote bilaterally rather than through one public order book. In practice the line blurs: many brokers aggregate ECN feeds together with bilateral bank and non-bank quotes and present the result as a single STP stream.
STP vs DMA
DMA — direct market access — means the client's order is placed directly onto a venue's order book, so the trader interacts with the underlying market and sees genuine depth. STP describes how a broker moves flow through to liquidity without a dealing desk, which may or may not be full DMA. An STP broker delivers DMA-style execution when it passes orders straight onto an exchange or ECN book; but STP can equally route to aggregated bilateral liquidity that is not a single public order book. So all DMA is effectively straight-through, but not all STP is DMA.
A-book delivery via STP
STP is the mechanism through which a broker runs an A-book. When a broker chooses to pass a client's risk out to the market rather than warehouse it, STP is how that pass-through actually happens: the order is routed to a liquidity provider that absorbs the position. The economics follow from the plumbing — no internalised position means no gain from client losses, and revenue comes from volume-based commission or markup instead.
This is also why an honest STP model has to be backed by real depth. If the liquidity behind the feed is thin, orders reject or slip when they are routed out, and the "straight-through" promise breaks down at exactly the moment it matters. Genuine STP is a claim about both conflict-free routing and the quality of what sits on the other end.
STP and Prime-of-Prime liquidity
For a broker running an STP book, the practical question is where the underlying liquidity comes from. A Prime of Prime (PoP) is built to answer it: it aggregates tier 1 bank and non-bank sources into one deep feed, intermediates the tier 1 credit a broker would otherwise struggle to obtain directly, and provides the execution and routing technology that makes straight-through processing work in practice. Rather than assembling and maintaining several bilateral relationships, an STP broker can connect once and route flow through a single aggregated feed. For the vocabulary used throughout this article, see the glossary.