The UK trading market is one of the most dynamic and well-regulated in Europe. With more UK traders turning to online trading, the demand for reliable and transparent brokers continues to grow.
Among the various types of platforms available, Straight Through Processing (STP) brokers have gained significant popularity in the UK, as they provide direct market access, competitive pricing, and enhanced transparency.
Eightcap
Axi
Pepperstone
IG
FxPro
FP MarketsBelow you can find more information about the best STP trading platforms in the UK:
- Eightcap, a broker regulated by the FCA, processes customer orders using STP technology without interference from an internal dealing desk, allowing it to avoid requotes and provide the best possible pricing.
- Axi, an FCA-regulated broker, relies on the STP model, routing orders directly onto its liquidity providers without re-entering or passing them through an in-house dealing desk. This results in sharp spreads from 0.0 pips for Pro Accounts (with a a £4.50 commission per standard contract).
- Pepperstone, a broker holding a license from the FCA, leverages the straight-through processing model to connect traders directly to aggregated tier-1 liquidity pools.
- IG, a broker authorised by the FCA, provides direct market access via dedicated DMA accounts that facilitate trading shares and forex with deep liquidity and advanced execution speeds.
- FxPro,an FCA-regulated brokerage, routes orders directly to liquidity providers without intervening, allowing for spreads as low as 0.0 pips with Raw+ accounts linked to MetaTrader 4 and MetaTrader 5.
- FP Markets ensures transparent trading by directly connecting clients to deep liquidity sources, bypassing any internal dealing desk.
This article provides an in-depth look at STP brokers, how they operate, and why they might be the best choice for UK traders. We also compare them with brokers using different pricing models, explain the account opening process, and outline the criteria we use to identify reliable STP brokers catering to the UK market. Also included on this page are brief overviews of the best UK-friendly brokers using this pricing model.
| Broker | ||
|---|---|---|
| Eightcap | ||
| Axi | ||
| Pepperstone | ||
| IG | ||
| FxPro | ||
| FP Markets | £50N/A   | £50N/A |
What Are STP Brokers in Brief?
STP stands for Straight Through Processing, a system that allows brokers to send client orders directly to liquidity providers like banks, financial institutions, or other brokers without any manual intervention. Unlike market makers, who often act as counterparties to their clients’ positions, STP brokers simply facilitate trade execution by passing client orders through to the market. This ensures faster order processing, narrower spreads, and greater price transparency.
STP brokers utilise advanced electronic trading systems to process and execute client orders swiftly and automatically. By establishing a direct connection to the market, these brokers ensure that trades are executed at the best available prices while maximising speed and efficiency. One of the standout features of STP brokers is their commitment to transparency. Traders can closely monitor market conditions and execution quality, which mirrors the real-time market dynamics.
This model is particularly favoured by seasoned traders and institutional investors who value fast and transparent order execution. However, trading with an STP broker does require a solid understanding of market conditions and effective trading strategies to achieve success. That said, STP brokers are not exclusive to professionals. Beginners can also benefit from their advantages, provided they take the time to understand and leverage the transparency and speed STP brokers offer.
Steps in the Order Execution Process at STP Brokers
The order execution process at STP brokers is straightforward and efficient. Here is a step-by-step breakdown of how client orders are executed. This seamless process ensures minimal delays and maximises the chances of getting the best possible price for your trades.
- Order Placement: The trader places a buy or sell order through the broker’s trading platform.
- Order Routing: The broker’s STP system automatically routes the order to one or more liquidity providers without any intervention.
- Price Matching: The liquidity providers offer the best available prices, and the system matches the order with the most favourable quote.
- Order Execution: The trade is executed at the best market price with a nominal spread markup added by the STP broker and a confirmation is sent back to the trader.
- Trade Settlement: After the trade is settled, the profits or losses are reflected in the trader’s account.
MetaTrader 5 Average Order Execution Speed
How Are STP Brokers Different from Market Makers?
The distinction between STP brokers and market makers lies primarily in their operational models, pricing structures, and how they handle client orders. Understanding these differences is crucial for traders, especially in a market like the UK, where transparency and fairness are highly valued.
Market makers, on the other hand, operate differently. They usually act as a counterparty to their clients’ trades, meaning they take the opposite side of every transaction. This allows them to control the pricing and execution of orders internally. While this model can provide liquidity, especially in less active markets, it also results in a potential conflict of interest. Market makers may widen their spreads or delay order execution to protect their own positions, which can disadvantage traders. Additionally, since market makers set their own prices, traders may not always receive the most competitive quotes available in the broader market.
Unlike STP brokers, market makers typically offer fixed rather than floating spreads. Another key difference lies in execution speed. STP brokers typically offer faster execution because orders are routed directly to liquidity providers without any intermediary steps. Market makers, however, may introduce slight delays as they process orders internally via proprietary dealing desks, which can be problematic during periods of high market volatility.
How Are STP Brokers Different from ECN Brokers?
The abbreviation ECN stands for “Electronic Communication Network”. STP and ECN brokers do share some similarities, such as offering direct market access and transparent pricing. Nevertheless, there are notable differences between the two pricing models that UK traders should consider when choosing an online broker.
One of the primary differences lies in how they connect traders to the market. STP brokers typically work with a select group of liquidity providers, such as banks or financial institutions, to execute client orders. When a trader places an order, the STP broker routes it directly to these third-party providers.
Another key difference is the pricing structure. Some STP brokers incorporate their fees into the spread in the form of markups, meaning traders may not see a separate commission charge. This can make the cost structure simpler and more predictable, especially for beginners. In contrast, ECN brokers offer raw spreads and charge volume-based commissions on each trade. While this can result in lower overall costs for high-volume traders, it may be less appealing to those who prefer a straightforward fee structure.
Account Opening at UK-Friendly STP Brokers
Opening an account with an STP broker in the UK is a straightforward process, but it’s important to choose a broker that adheres to regulations and caters to the specific needs of UK traders. One of the key aspects of account opening in the UK is compliance with the verification requirements set by the FCA. These requirements are designed to prevent financial crimes such as money laundering and fraud, ensuring a secure trading environment for all parties involved.
Registration
Most STP brokers offer a simple online registration process eligible customers can complete in under 10 minutes. Once they launch the sign-up form, onboarding customers must provide some basic personal information, such as their name, address, and contact details. FCA-regulated brokers also require information about each client’s employment status and trading experience, especially when it comes to dealing with complex derivative instruments.
Account Verification
FCA mandates strict Know Your Customer (KYC) procedures for all financial service providers, including STP brokers. Although the UK is no longer a member of the EU, the majority of the requirements set by the FCA align with the EU Anti-Money Laundering directives and are essential for maintaining the integrity of the financial system. For UK traders, this means that brokers must verify their identity and address before allowing them to trade.
The verification process typically involves submitting official documents, such as a government-issued ID (passport or national ID card) and a recent proof of address (a utility bill or bank statement). FCA also allows for innovative verification methods to streamline the onboarding process while maintaining compliance. The two methods commonly used by STP brokers in the UK are video verification and Post Ident.
- Video Verification: This method involves a live video call from a broker representative. During the call, the trader presents their ID documents, and the representative verifies their authenticity in real-time. The process is quick, secure, and convenient, as it can be done from any device connected to the internet.
- Post Ident: This is an in-person verification method conducted at a local post office or bank. The trader brings their documents to a participating post office or bank, where an employee verifies their identity and submits the information to the broker. While this method is highly reliable, it may be less convenient for some traders due to the need to visit a physical location.
Depositing Funds
Once the verification process is complete, traders can fund their accounts using a variety of payment methods. In the UK, the most popular deposit options include bank transfers, debit and credit cards, and digital wallets, although availability is broker-specific.
- Bank Transfers: This is a traditional, familiar, and secure payment method, though it may take longer for the funds to reach your live trading balance.
- Debit and Credit Cards: Cards are widely used for their speed and convenience, allowing UK traders to deposit funds instantly. Cards issued by Visa and Mastercard are the most commonly available methods for UK traders.
- E-Wallets: Digital wallets like PayPal, Skrill, and Neteller are increasingly popular due to their fast processing times and ease of use.
How We Identify Reliable STP Brokers for UK Traders
Choosing the right STP broker is crucial for your overall trading experience and results. We rely on multiple criteria to evaluate UK-friendly brokers and identify those offering the best trading conditions to customers from the country. Here are some of the key aspects we check during our review and assessment process.
- FCA Authorisation: The broker should be preferably regulated by FCA (the UK’s Financial Conduct Authority) to ensure compliance with the law.
- Competitive Spreads and Trading Conditions: We look for brokers that offer the tightest spreads, low commissions, and favourable trading conditions overall.
- Range of Trading Platforms: Our recommended brokers provide access to popular platforms like MetaTrader 4 or 5, which are widely used by UK traders.
- Range of Tradable Markets: A good STP broker should offer a diverse range of markets, including forex, stocks, indices, cryptocurrencies, and commodities.
- Top-notch Customer Support: Offering reliable and timely customer support is essential for properly addressing the needs of UK traders.
- Convenient Deposit and Withdrawal Methods: The broker should support popular payment methods in the UK and offer fast, low-cost, and hassle-free transactions.
Advantages and Disadvantages of Using STP Brokers
STP brokers offer a range of benefits that make them an attractive choice for UK traders, particularly those who value transparency and efficiency. Despite their advantages, they also come with certain drawbacks that traders should carefully consider. Below, we explore the key advantages and disadvantages of using STP brokers to help you make an informed decision.
Advantages
- Transparency: STP brokers offer direct market access, ensuring fair and transparent pricing.
- No Conflict of Interest: Since STP brokers do not trade against their clients, there’s no conflict of interest.
- Fast Execution: Orders are executed exceptionally fast, reducing the risk of slippage.
- Competitive Spreads: STP brokers often provide tighter spreads compared to market makers.
Disadvantages
- Limited Liquidity: STP brokers may have fewer liquidity providers compared to ECN brokers.
- Variable Spreads: Spreads can widen during periods of high market volatility.
- Potential Fees: Some STP brokers may charge commissions on top of their spreads.
FAQs about STP Brokers in the UK
What is the minimum deposit amount at STP brokers in the UK?
The minimum deposit amount at STP brokers in the UK varies depending on the broker and the type of account. Generally, it can range from as low as £0 for basic accounts to £1,000 or more for premium accounts with enhanced features. Some brokers also offer demo accounts with no deposit requirement, allowing traders to practise before committing real funds. Always check the specific broker’s terms to find an option that suits your budget and trading goals.
Do I necessarily have to trade with an STP broker regulated by FCA?
While it’s not mandatory to trade with an STP broker regulated by FCA, doing so is highly recommended for UK traders. FCA-licensed brokers adhere to strict standards, ensuring transparency, security, and utmost compliance with the law. With that said, you can also choose brokers regulated by reputable EU or EEA authorities, like CySEC, as they all comply with the MiFID II directive, which stipulates regulatory requirements similar to those adopted by the FCA. Having said that, UK traders who register with FCA-regulated STP brokers are eligible for a compensation of up to £85,000 in the event of broker insolvency.”.
What are the average commissions charged by STP brokers catering to the UK market?
STP brokers catering to the UK market typically charge average commissions ranging from £3 to £3.5 per side per standard lot (100,000 base currency units). Forex spreads often drop as low as 0.1 pips per trade, but it all depends on the broker and the current market conditions. We recommend checking the product specifications of your chosen broker beforehand to familiarise yourself with all trading expenses you can anticipate.
How long does the verification process take at UK-friendly forex brokers?
The verification process at UK-friendly forex brokers may take 1 to 2 business days, depending on the method used and the workload of the broker’s support team. Using video verification is usually quicker and more convenient, allowing you to verify yourself within minutes to a couple of hours. Traditional methods like Post Ident may take slightly longer due to in-person requirements. Delays can occur if documents are unclear or additional information is needed, so ensure all submitted materials are accurate and up-to-date.