ECN vs STP vs market maker: which execution model costs you least?
Short answer: ECN (Electronic Communication Network) brokers pass through raw interbank spreads and charge a per-lot commission, typically costing $5.50-$7.70 per EUR/USD lot. STP (Straight Through Processing) brokers add a small markup to the spread with no commission, costing $8-$12. Market makers set their own prices, often with fixed spreads of $9-$10+ per lot. For active traders, ECN is usually cheapest; for news traders, fixed market-maker pricing can save money during volatile events.
Key takeaways
- ECN = raw spread + commission. Usually the cheapest for active traders ($5.50-$7.70/lot).
- STP = slightly marked-up spread, no commission. A middle ground ($8-$12/lot).
- Market maker = broker sets the price. Often fixed spreads — predictable but higher ($9+/lot).
- During high-impact news, ECN spreads can spike 3-5x. Fixed spreads stay flat.
- The model alone does not determine cost — compare all-in per lot, not the label.
Brokers market themselves as “ECN,” “STP” or “market maker” as though the label alone determines quality. It does not. What matters is the all-in cost per lot — and that depends on the specifics of each broker’s implementation, not the acronym on their homepage.
The three models
ECN (Electronic Communication Network)
The broker connects your order directly to a pool of liquidity providers (banks, hedge funds, other brokers). You see the raw interbank spread — sometimes 0.0 pips — and pay a separate commission per lot.
Typical cost: $5.50–$7.70 per EUR/USD lot (spread + commission).
Who it suits: active traders, scalpers, EA operators who trade during liquid sessions.
STP (Straight Through Processing)
The broker routes your order to liquidity providers but adds a small markup to the spread rather than charging a commission. Execution is non-dealing-desk (the broker does not take the other side).
Typical cost: $8–$12 per EUR/USD lot (marked-up spread, no commission).
Who it suits: traders who prefer a single spread figure with no separate commission line.
Market maker
The broker sets its own bid/ask prices and takes the other side of your trade. Spreads are often fixed — they do not widen during volatile events. The broker profits from the spread.
Typical cost: $9–$15 per EUR/USD lot (fixed or variable spread, no commission).
Who it suits: news traders, beginners who value cost predictability.
The cost comparison in practice
| Broker | Model | EUR/USD cost/lot | Notes |
|---|---|---|---|
| IC Markets | ECN | circa $7.20 | Lowest raw spread in our dataset |
| Pepperstone | ECN/STP | circa $7.70 | FCA regulated, TradingView |
| FXTM | ECN | circa $5.50 | Lowest commission ($2/side) |
| Exness | STP | circa $5.00 (Standard) | Cheapest standard account |
| AvaTrade | Market maker | circa $9.00 | Fixed 0.9 pips |
The news-event trap
During a high-impact data release (Non-Farm Payrolls, central bank decisions), ECN liquidity thins and spreads spike. A EUR/USD spread that normally sits at 0.02 pips can jump to 3–5 pips for 30–60 seconds. That spike turns a $7.20 trade into a $37+ trade.
Fixed-spread market makers like AvaTrade maintain their 0.9-pip quote through the event. If you routinely trade the news, the “more expensive” market maker may be cheaper on the trades that matter.
Bottom line
Do not choose a broker based on the execution-model label. Calculate the all-in cost per lot during your own trading sessions and compare. The cheapest broker for a London-session scalper is likely ECN; for a news-event trader, it may be a fixed-spread market maker. Our cost ranking does this maths for you.
Frequently asked questions
Are ECN brokers always cheaper?
During normal market conditions, yes. During high-impact news events, ECN spreads can widen dramatically (3-5x), making fixed-spread market makers temporarily cheaper.
Can a broker be both ECN and STP?
Loosely. Some brokers route retail orders via STP to ECN liquidity. The distinction matters less than the all-in cost per lot — check that number, not the label.
Do market makers trade against me?
Market makers take the other side of your trade, which creates a theoretical conflict of interest. In practice, regulated market makers (FCA/ASIC) are bound by best-execution rules. The real cost difference is in the spread, not the model's theory.