What is STP, ECN and OTC trading?

STP (Straight Through Processing) vs ECN (Electronic Communication Network)

Straight Through Processing (STP) usually refers to the method of processing Forex trades which routes them “straight through” a broker's servers and onto liquidity providers without having to be re-entered and without any dealing desk intervention. In effect, orders are sent to the liquidity provider without any intervention by the broker, meaning the broker has no conflict of interest – with clients or the liquidity provider – and the only profit is generated on spreads and/or commission markup (if any).

Standard Axi accounts operate under the STP model.

Electronic Communication Network (ECN) brokers are like STPs in that neither has a conflict of interest with clients. The main difference is that the ECN consolidates price quotations from several market participants, with the advantage being that the broker can usually offer a better (lower) spread price to clients.

Axi does not offer a dedicated ECN account, but we do offer a Pro account that has the same characteristics as an ECN account.

Over the Counter (OTC)

Over the counter (OTC) trading refers to a decentralized method of trading financial instruments directly between two parties without the involvement of a centralized exchange. Unlike exchange-traded markets, OTC trading happens directly between buyers and sellers in the open market. At Axi, you do this using the electronic trading platform (MT4/MT5).