ECN stands for Electronic Communication Network and refers to an automated trading feature that links individual traders with the liquidity providers like banks, prime brokerages and retail brokerages, and even other traders. This mechanism allows individuals with every form of trading account access to the capital markets regardless of their balance sizes. Linking all traders, big and small, with liquidity providers directly removes the need for a middleman in your transactions. ECN trading offers you narrower spreads and better market pricing. This is because the ECN broker consolidates quotes from several participants to offer you the tightest possible bid/ask spreads. Envision it as a marketplace for broker’s clients to trade with each other, so traders like you can get the best possible offer at the moment in time.
One thing to note is that ECN brokers avoid wider spreads that are common with a traditional broker. However, the ECN broker will benefit from commission fees per transaction – this is a fixed, transparent commission.
CM Index will deliver much tighter spreads compared to the traditional broker because there is no middleman. Price quotes are obtained from various market participants, ensuring larger spreads are avoided by the ECN trade.
Your ECN broker will deliver much tighter spreads compared to the traditional broker because there is no middleman. Price quotes are obtained from various market participants, ensuring larger spreads are avoided by the ECN trade.
Originally, STP was a term introduced when electronic trading became available back in the day. It described the procedure that companies use to optimize the speed at which they process transactions. Electronic trading enables “straight-through processing” (STP), by which trades entered electronically can likewise be processed (cleared and settled) electronically. Because STP involves no paperwork and little human intervention, errors are mostly eliminated which dramatically lowers operational costs and risk. In a nutshell, STP enables the entire trade process to be conducted electronically without the need for re-keying or manual intervention.
An STP broker takes your trades and automatically processes them through to their group of banks and liquidity providers. The group of banks sends back a price, the broker adds a spread on top of the price and the broker profits from the spread they charge to traders. With this model of a broker, you have a choice of not paying commissions and paying a slightly higher spread, or you can pay a commission on each trade and pay lower spreads.
You will only pay the spread once per round trip; that is you only pay the spread once per completed trade. There will be no commission charges applied to the trades. CM Index is an advocate of the adoption of more transparent and ethical practices across the online trading industry. For this reason, we have developed an award-winning model of execution that meets both trader demands and ethical standards.
As not all client positions are hedged, a residual exposure up to our market risk limit remains in the house. Excess exposure may be hedged externally.
Clients can get a chance on the competitive bid/ask rates due to the presence of a wide range of liquidity providers which provides more market depth.
Clients can get a chance on the competitive bid/ask rates due to the presence of a wide range of liquidity which provides more market depth.
We are able to internally match a great deal of our order flow. This allows us to minimize our risk without interfering with your orders in any way.