Forex glossary
STP broker
STP means automated processing without routine manual handling between stages. A broker may use it to describe routing or hedging through liquidity providers. It does not establish an agency-only role or rule out being the CFD counterparty; those roles come from the service documents.
Illustrative example
How does it work in practice?
In a hypothetical STP process, a client buys a 5,000 EUR CFD and the system automatically makes a separate bank hedge. Automation describes processing; the client contract may still name the provider as counterparty.
A case to work through
An automated rejection
Model: an STP system automatically forwards a request; the next stage rejects it for unavailable volume.
- Automation operated, but no deal resulted.
- Check the rejection code and status of other instructions.
What follows? Assess confirmed deals rather than processing speed alone.
Example boundary: This hypothetical process does not establish the legal counterparty.
A useful distinction
STP broker / A-book
A-book describes external exposure hedging; STP describes processing between stages.
Check your understanding
Separate automation from the order’s result.
Show the answer and explanation
No, a trade confirmation is needed
Processing can end with rejection.
From provider structure to confirmation
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Read the fuller explanation
Related terms
Sources and documentation
- FCA — CP16/40, Chapter 2: CFD provider business models
Historical consultation, sections 2.2 and 2.9: the CFD counterparty and external hedging are separate matters. This is not evidence of current leverage limits.
Document read:
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.