STP means “right through the process.” STP Forex brokers send orders directly from their clients to the liquidity providers, ie international banks. Have STP brokers may not just one vendor, but a few. And the greater the number of banks involved in the process, and the more, consequently, the liquidity, the better it is for clients.
The basic principle of STP-platform – an open access to the real market traders, as well as to the market price, plus the possibility of immediate order execution without the dealer.
STP brokers face a choice: fixed or floating spreads. However, STP forex brokers organize trade exclusively through international banks. As intermediaries between their clients and the banks, they receive quotes (and spread, respectively), announced in the interbank market. Most of the banks, according to statistics, offer fixed spreads and are market-makers themselves.
The profit of these companies is to increase the spread, banks are treated initially given orders for quotations, and the difference itself take STP forex brokers.