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STP, ECN or DD execution system?


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  • 2 years later...
  • 2 years later...

I recently researched the info requested in this thread, and here goes another biennial post.😅

It seems to depend on the instrument traded and the jurisdiction in which it's traded. In IG's US forex instruments, the terms are pretty clear:

We enter into all Transactions with you as principal, and not as agent. (Margin Trading Customer Agreement, Section 4); and

When we execute an offsetting position with a counterparty prior to executing your order (straight-through-processing), and that offsetting position is cancelled or adjusted by the counterparty, we reserve the right to pass on this cancellation or adjustment to you in accordance with NFA Compliance Rule 2-43(a). (Margin Trading Customer Agreement, Section 8).

I interpret the first paragraph to mean that IG is generally a market-maker, possibly synonymous with a dealing-desk. I interpret the second paragraph to mean that IG may, at times, be a straight-through-processor.

IG in UK and AU appear to have a direct-market-access account where you'd actually be trading CFD's in parallel to the forex market(s) with nuanced order execution types.

I wouldn't fuss over ECN too much. There are bucket shop "ECN" brokers out there, and rock solid market-maker brokers too. It's just a pricing model.

Anyway, most jurisdictions require brokers to publicly disclose things so hey, just look them up!

Edited by RJo
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