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What is straight-through processing (STP) in forex brokerage?

Straight-through processing (STP) refers to brokers routing client orders directly to liquidity providers without manual intervention. Unlike dealing desk models, STP minimizes broker conflict of interest—traders’ profits or losses do not directly affect broker revenue. Institutions demand STP execution for transparency, while retail traders gain fairer fills. Benefits: reduced slippage, fewer re-quotes, and alignment with global best practices. Risks: not all brokers advertising “STP” truly provide it—some blend STP with internalization. Traders should review broker disclosures carefully. STP is part of the broader trend toward fairness and automation, enabling traders to operate in markets closer to true interbank conditions.