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No dealing desk (NDD) – forex broker

Having looked at the two extremes in terms of $orex brokersan ECN broker at one end, and the market maker broker at the other, let’s now look at the No dealing desk broker who sits somewhere in the middle.

NDD Forex Broker

As the name implies an NDD $orex broker no dealing desk and has more in common with an ECN broker than a market maker broker. The NDD broker gets his liquidity quotes from the interbank market, and all orders are passed through direct into the market with no dealing desk intervention. The NDD broker then has two ways to profit from the trades executed, either by charging a commission as with an ECN broker, or by increasing the spreads like a market maker.The important points to note with a true NDD broker are as follows :

  • Whist prices quoted are from the central pool of interbank liquidity, you are not trading in the pool itself and being matched with other buyers and sellers, as is the case with an ECN
  • There are no re-quotes with an NDD dealer – the price you submit your order, is the price quoted.

As with an ECN broker,  there is no dealing desk involved, and the NDD broker will not take a position against you. With no re-quotes, and interbank prices being quoted, you are always guaranteed a fast fill and transparent trading conditions, as with an ECN. In addition, true NDD brokers will continue to provide real time market quotes even during volatile trading conditions on major news releases, meaning that forex traders are not restricted in their $orex tradingategies with this type of broker. The main advantages and disadvantages are as follows :

Advantages – NDD forex broker

  • No dealing desk order transparency
  • Real time quotes from the interbank liquidity pool
  • No conflict issues of NDD brokers trading against you
  • No re-quotes on forex trades

Disadvantages  – NDD forex broker

  • May charge commission on each forex trade
  • More complicated trading platform
  • No free charts or news feeds

Finally let’s look at the last group of forex brokers which is the STP, straight through processing broker.