What is Straight Through Processing (STP)?

Straight Through Processing (STP) is a No Dealing Desk execution model in which a broker passes client orders automatically to external liquidity providers — banks, non-bank market makers, and other funds — without a dealer intervening. The broker does not take the opposite side of the trade; it earns by adding a small markup to the liquidity providers' spread.

STP contrasts with the market-maker (B-Book) model, where the broker internalises the trade and profits when the client loses. Under STP, the client's fills come from real counterparties, so the broker's revenue rises with trading volume rather than with client losses. This is why STP is described as A-Book: the broker's interest is aligned with active, surviving clients.

Key takeaways

Orders auto-routed to liquidity providers; no dealing-desk intervention.
Broker earns from spread markup/commission, not client losses (A-Book).
Interest aligned with active clients — good for IB rebate longevity.
Distinct from ECN, which typically charges raw spread plus fixed commission.
Many brokers run hybrid A-Book/B-Book, so verify the actual routing.

Mechanically, when a trader clicks buy, the STP bridge (such as oneZero or PrimeXM) routes the order to the best available quote from a pool of liquidity providers, adds the broker's configured markup, and returns the fill. If the raw EUR/USD spread from the liquidity pool is 0.2 pips and the broker adds 0.8 pips, the client sees 1.0 pip and the broker keeps 0.8 pips on that round turn.

Many brokers run a hybrid book, A-Booking profitable or high-volume clients to liquidity providers and B-Booking others based on risk profile. So "STP broker" describes the execution route, not necessarily a promise that every order is externalised.

How it works

When a client places an order, the broker's aggregation bridge polls its connected liquidity providers for the best bid and ask. It selects the top quote, applies the broker's markup, and executes the client against that price, hedging the exposure with the liquidity provider almost simultaneously.

Because the broker holds little or no directional exposure, its profit is the markup times the volume traded, plus any commission. There is no dealing desk deciding whether to fill or requote, which is why STP typically delivers faster, requote-free execution suited to automated and high-frequency styles.

The quality of an STP setup depends on the depth of its liquidity pool and the speed of its bridge. A broker connected to a dozen tier-1 liquidity providers through a low-latency bridge offers tighter, more reliable fills than one relying on a single provider.

Client submits order

The trader clicks buy or sell on the platform (e.g. MT4/MT5); the order hits the broker's aggregation bridge.

Liquidity aggregation

The bridge polls connected liquidity providers and selects the best available bid/ask from the pool.

Markup applied

The broker adds its configured spread markup (and/or a commission) to the raw price the client receives.

Fill and hedge

The client is filled and the broker hedges the exposure with the liquidity provider, holding little directional risk.

IB rebate

The broker shares part of the markup or commission with the IB as a volume-based rebate.

Why it matters for partnership: STP brokers are IB-friendly because revenue is volume-driven, not loss-driven, so profitable clients are welcomed rather than restricted. That protects your rebate stream and lets you market fast, requote-free execution to scalpers and EA users without a conflict-of-interest objection.

Formula

Client Spread = Raw LP Spread + Broker Markup

Real World Example

Pepperstone markets its Razor account as No Dealing Desk with raw spreads from tier-1 liquidity providers plus a fixed commission. An IB introduces a scalper who trades 300 lots a month; because Pepperstone routes the flow to liquidity providers and profits on volume, it has no incentive to restrict the profitable client, and the IB keeps earning a per-lot rebate month after month.

STP vs. ECN vs. Market Maker

Feature	STP (A-Book)	ECN	Market Maker (B-Book)
Order routing	To liquidity providers	Into a shared order book	Internalised by broker
Broker revenue	Spread markup	Fixed commission on raw spread	Client losses + spread
Conflict of interest	Low	Low	High
Typical spread	Marked-up, no separate commission	Raw + commission	Fixed/wider, no commission
Best suited to	General NDD traders	Scalpers, high volume	Beginners, micro accounts

Pro Tip

Market STP to EA users and scalpers who need requote-free fills, but confirm in the broker's execution policy whether flow is genuinely A-Booked before you promise "no conflict of interest."

Common Pitfalls

Confusing STP with ECN in your copy: STP brokers usually earn via a spread markup while ECN brokers charge a separate fixed commission on raw spreads, and mislabelling erodes trust with knowledgeable traders.

FAQ

How do IBs get paid by STP brokers?

Typically a share of the spread markup and/or a per-lot rebate on the commission, paid on the volume introduced clients trade.

Is STP the same as ECN?

Both are No Dealing Desk, but STP brokers usually earn from a spread markup, while ECN brokers pass raw spreads and charge a separate fixed commission.

Does an STP broker trade against me?

On genuinely externalised flow, no — the order goes to liquidity providers. But many brokers run hybrid books, so check the execution policy.

Is STP better for scalping?

Often yes, because automated routing avoids dealing-desk requotes and delays, though fill quality still depends on the broker's liquidity depth and latency.

Why would a broker prefer STP over market making?

It removes directional risk and makes revenue volume-driven, which suits brokers with large, active client bases and reduces conflict-of-interest complaints.

How can I verify a broker really uses STP?

Read its order-execution policy, check the regulator disclosures, and look for named liquidity providers or a disclosed hybrid A-Book/B-Book model.

Reviewed by the Revenika Editorial Desk Last updated August 5, 2026