Business Model

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A STP/ECN Brokerage

Samtrade FX operates as a STP/ECN brokerage, also known as a No-Dealing-Desk Brokerage. The term STP is known as 'Straight-Through-Processing', in this model, the brokerage acts as agents for their client either passing through trades straight through to their liquidity providers or are matched up with other traders using ECN, known as 'Electronic Communication Network'.

The STP/ECN model is favored by many traders, as this execution model allows a brokerage to make a profit regardless of whether a trader is profitable or not. This is due to the fact that the brokerage never takes the other side of a client's trade and simply passes the risk on to a liquidity provider or trading using the firm's Electronic Communication Network (ECN). Another reason it is favored by traders is that firms operating in the STP/ECN model are often able to offer more competitive spreads. Market makers tend to offer wider spreads as one way of managing risk, though this is not true for all market makers. STP/ECN brokerages pass many trades on to the liquidity providers who are able to offer very tight spreads due to the huge volumes they are dealing in, meaning under standard market conditions spreads tend to be much tighter.

At Samtrade FX there's never a conflict of interest between us and our clients. As a STP/ECN brokerage, your trades are passed on straight to our liquidity providers; we make only a marginal profit on commissions, which stems from traded volume. The model of our business means that there absolutely no benefit to us in our clients losing. In fact, we want you to make money, so that you will continue trading!

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