I think this explanation will help even newbies "to be in the subject"
Dealing Desk
Dealing Desk is a hybrid netting model of processing and execution of orders where the broker acts as an intermediary between traders and market makers. In case of equal amounts of opposite orders for purchase and sale, execution of transactions is conducted on the broker's server and not hedged positions are combined, and this net position is displayed on the level of prime broker.
While executing of client orders according to the method DD, broker lays its interest cost in the form of the spread. The commission does not included, therefore, the greater the volume of the transaction is, the cheaper is brokerage services since a fixed spread is used.
Another advantage of this type of execution is trading with minimal deposit. Volume contracts are traded on the open market, but the processing of orders takes place on the server of the broker, currency trading is available even for cent accounts with using fractional lots. It is through Dealing Desk, trading on Forex is possible with a small deposit and risk reduction.
Non-DealingDesk
The method of overlapping orders «Non-Dealing Desk» means that all client's transactions with "bridge" output by broker to opened interbank market, and the orders are executed without interference of retail dealer.
This model gives to traders the benefits such as unlimited liquidity, narrow spreads and market instant, faultless execution on the desired price. This quality of execution is achieved by the fact that on the open market, millions of members trade with each other directly, and each application for purchasing necessarily receive a counter order to sell.
With technology «Non-Dealing Desk», broker remains aloof and therefore the spread does not increase due to the company's interest. Per serving the system for the transmission of orders to market makers, broker takes small fee from each transaction, and this fee while trading on small amounts is almost unnoticeable, but with increasing of lot, commission remains below than fixed spreads.
Straight Through Processing
STP is a technology straight through processing of transaction which using the NDD method of overlapping, it relates to off-dealing execution and is fully automatic. Automation of processes of orders transfer to the interbank market increses execution of transactions in many times. Client orders pass through a broker and get directly to the counterparty, which is engaged in orders processing.
This technology allows you to bypass calculated risks, because the speed and accuracy of execution excludes price change during processing. Shipping of quotations from market makers are in a permanent mode via Bridge technology, in order to at any time, an order submitted by the client got needed liquidity, and was executed with the maximum accuracy.
STP technology is the best solution for scalping: this method of the orders execution allows to enter the market within one second as accurately as possible with the price, which is very important for strategies with small and frequent profits. STP is also optimal when trading advisors focused on the speed of execution of transactions. With straight through processing of the orders, such advisers are the most effective and profitable.
STP - Direct Market Access
STP-DMA is an order execution technology outside dealing, which not only opens the interbank market for private traders, but also makes traders a price-makers. When processing orders at STP-DMA technology, client does not need to take the quotation offered by the broker. Client orders are transmitted directly to the liquidity providers at that price, which is set by traders themselves, and directly executes by the huge flow of counter orders.
Unlimited liquidity of open market at STP-DMA provides orders execution of any size and at any price, that is profitable for the trader. Thus due to the huge amount of orders, requotes are excluded, and by automating of all processes, speed of execution reaches fraction of a second. Thus, the opening and closing of position is strictly on a clique, both in terms of price and in terms of speed.
The cost of processing and execution of orders on STP-DMA is minimal, since the large trading volumes allow liquidity providers reduce spreads to almost a zero. Broker remains aloof and does not participate in the processing of orders, so there is no spread of broker. For the use of a "bridge" transfer of orders to liquidity providers, broker uses small fixed fees.
Electronic Communications Network
ECN - is a model of an order execution on NDD technology through an electronic trading platform. Within such an electronic trading system are collected orders from a huge number of participants of financial market, forming the so-called "glass", where the clearing occurs - each client order receives an counter order without the participation of a intermediary.
Execution of transactions carried out through the automatic selection of the relevant orders, which takes into account parameters such as asset price of the transaction and its volume. When the coincidence of all these parameters occurs, both opposite orders are executed .
When client clicks on the button to open an order, occurs a transmission of order in a single order book and its association with the other application. As this multi-step procedure is fully automated, the whole process can take less than a second , and the client receives the execution of his application instantly at the moment of clicking on the Buy or Sell.
