Non Dealing Desk Broker: definition, how it works, pros and cons

A No Dealing Desk (NDD) Forex broker works by connecting traders directly to liquidity providers without routing orders through a dealing desk. NDD brokers, also known as Straight Through Processing or Direct Market Access brokers, represent a brokerage execution model that provides transparent pricing from the interbank foreign exchange market. These brokers facilitate access to the $7.5 trillion daily forex market by eliminating intermediary intervention between retail traders and institutional liquidity sources.

Retail traders interact with tier-1 liquidity providers, such as Deutsche Bank, UBS, and Citigroup, through automated order routing systems that bypass traditional dealing desk operations. Electronic Broking Services and Thomson Reuters Dealing platforms connect over 1000 banks to create the interbank network infrastructure that NDD brokers access. The execution mechanism involves either charging commissions ranging from $2.25 to $8 per lot or applying spread markups of approximately 1 pip to raw interbank pricing. NDD brokers offer variable spreads starting from 0.0 pips plus commission, delivering tighter pricing than dealing desk alternatives while providing faster execution speeds averaging 77 to 100 milliseconds. The model eliminates requotes and price manipulation risks but typically involves higher commission costs compared to market maker brokers that offer commission-free trading with wider spreads.

NDD execution models encompass both Straight Through Processing systems and Electronic Communication Network configurations, establishing the foundation for understanding broader No Dealing Desk market structures and their impact on forex trading operations.

In the world of Forex trading, the term “Non-Dealing Desk” (NDD) can be somewhat misleading, as it suggests a complete absence of a dealing desk. However, the reality is slightly different, particularly when considering that Forex trading typically involves Contracts for Difference (CFDs).

In CFD trading, the broker is always your counterparty. This means that when you open a position in the Forex market, you’re essentially entering into a contract with the broker.

What distinguishes a Non-Dealing Desk broker from Dealing Desk brokers is the way it manages the risks associated with being the counterparty to your trades.

NDD brokers employ a strategy known as hedging to mitigate the risks they face from their clients’ trades. This hedging process involves offsetting the positions taken by traders by executing equal trades with Liquidity Providers. By doing this, an NDD broker Forex can balance out the profits and losses from the trades they counter, effectively managing the counterparty risk.

Above all, this means that an NDD broker aligns his interests with those of the trader, and does not profit from his losses, effectively eliminating conflicts of interest.

On the other hand, Market Makers, which represent a different type of Forex broker, operate without this hedging process. They take on the full risk of the counterparty trades without seeking to offset this risk through Liquidity Providers. This means that Market Makers bear the entire brunt of the risk associated with their clients’ trading activities.

In essence, while both NDD brokers and Market Makers serve as counterparties to your trades, their approach to managing the inherent risks of this role is fundamentally different. NDD brokers mitigate these risks through hedging with Liquidity Providers, whereas Market Makers assume full responsibility for them.

An NDD (Non-Dealing Desk) Forex broker operates through a series of interconnected steps, all aimed at providing retail traders with a seamless and transparent trading experience.

Initially, the NDD broker receives a stream of pricing data and quotes from various Liquidity Providers (LPs) it has direct partnerships with. These providers can include Prime Brokers, Prime of Primes, Electronic Communication Networks (ECNs), and non-bank liquidity providers.

The broker’s role here is to aggregate this information to ensure that traders are given access to the most competitive and accurate market prices available.

Once the broker has aggregated these prices, they offer traders the tightest possible spreads.

When a trader decides to open a position, they are essentially entering into a Contract for Difference (CFD) with the broker. This contract reflects the trader’s speculation on the future direction of a currency pair’s price. It’s important to note that the trader is not buying or selling actual currency but rather a derivative product that tracks the price movement of the currency pair.

After a trade is executed, the NDD broker’s role shifts to managing the risk associated with being the counterparty to the trade. To do this, the broker hedges the trade with one or more of its Liquidity Providers.

This hedging process involves the broker taking an equal position to the trader’s with the Liquidity Provider. By doing so, the broker can offset any potential profit or loss arising from the trader’s position.

This option of externalising risk by hedging trades as opposed to internalising risk by acting entirely as a counterparty is called A-Book vs B-Book.

NDD order execution operates through two primary models that route client orders directly to external market participants without broker-side dealing desk intervention. Both systems eliminate internal trade processing and connect traders to interbank liquidity sources.

• STP: Straight-Through Processing routes client trades directly to liquidity providers such as banks, hedge funds, and institutional investors through aggregated price streams. STP brokers typically add markup spreads of approximately 0.25 pips to the raw interbank rates and operate without separate commission charges. The STP broker will then replicate the same trade at the liquidity provider, and the latter will act as the broker’s counterparty.
• ECN: Electronic Communication Network routing channels orders to anonymous order books where participant bids and offers cross through matching algorithms. ECN execution delivers variable spreads starting from 0.0 pips but charges fixed commissions averaging $3.50 per lot per side, equating to $7.00 per round-turn transaction. When the trader opens a trade, the ECN broker will immediately counterparty it with a CFD, and then it will replicate the same trade with the ECN, which will match it with a counterparty inside it.

Both execution pathways function under the broader NDD framework by bypassing internal dealing desk operations and connecting retail traders to institutional market depth. Market participants access transparent pricing through these automated systems, though concerns about price integrity remain when evaluating how effectively each STP broker and ECN broker maintains competitive execution standards. The distinction becomes crucial when assessing whether execution quality meets trader expectations across different market conditions.

While it is less likely for NDD (Non-Dealing Desk) Forex brokers to manipulate prices, it is not entirely impossible, as they are still market makers providing CFDs.

However, in the NDD model, brokers earn their revenue primarily through spreads and commissions rather than from traders’ losses. This fundamental difference in revenue generation aligns the broker’s interests more closely with those of their clients, as their profitability is not directly linked to the trading losses of traders.

Another crucial factor that reduces the likelihood of price manipulation by NDD brokers is regulation. Most reputable NDD brokers are subject to stringent regulatory oversight by financial authorities. These regulatory bodies enforce rules and standards designed to ensure fair trading practices and to protect the interests of traders. Brokers are required to adhere to these standards, which include providing transparent pricing and fair execution of trades.

NDD Forex brokers typically charge trading fees either through a markup on the spread or via commissions on trades.

In the NDD model, brokers can apply a markup to the spread they receive from their liquidity providers. By marking up (adding an additional fixed fee) this spread slightly, NDD brokers earn revenue on each trade executed.

Alternatively, some NDD brokers charge a commission on trades, usually on ECN execution. This fee is usually a fixed amount per lot traded or a percentage of the trade’s volume.

Following is a comparison of the NDD model with the Market Maker model in Forex brokers.

• Risk Management Approach: NDD brokers hedge risk with external liquidity providers, reducing exposure. Market Makers, as counterparties to trades, absorb these risks, posing a potential conflict of interest.
• Pricing and Spreads: NDD brokers offer variable spreads influenced by liquidity sources, while Market Makers typically have fixed spreads, which may not always reflect real market conditions.
• Execution of Trades: NDD brokers ensure faster trade execution through direct market access, whereas Market Makers might have slower execution, leading to possible re-quotes in fast-moving markets.
• Transparency and Conflict of Interest: NDD brokers are seen as more transparent, passing trades to external parties without benefiting from client losses. Market Makers face conflicts of interest, potentially manipulating prices due to their control over execution.
• Regulatory Oversight: Both types of brokers are regulated, but Market Makers may face stricter requirements due to their potential conflicts of interest.

In summary, an NDD Forex broker is usually preferred for its transparency and efficient execution, while a Market Maker Forex broker offers stability with fixed spreads.

Under the Non-Dealing Desk (NDD) model, Forex brokers have distinct ways of earning money, which primarily revolve around trading fees and non-trading fees.

In the case of STP (Straight Through Processing) brokers, the primary source of revenue is through spread markups. These brokers receive raw spreads from their liquidity providers and add a small markup before passing these prices onto traders. This markup represents the broker’s profit margin.

On the other hand, ECN (Electronic Communication Network) brokers, typically earn money through commissions on trades. Instead of marking up the spread, ECN brokers charge a commission for every transaction, calculated on percentage or lot size.

NDD Forex brokers also generate revenue through swap fees, which are small commissions charged on positions held overnight by traders.

Trading fees represent the most important part of how a Forex broker makes money.

Apart from these trading fees, all NDD brokers also generate income through various non-trading fees. These can include charges for various currency conversions, inactivity fees for dormant accounts, withdrawal fees, and other administrative costs. Such fees are a consistent source of income for brokers, supplementing their earnings from trading activities.

The advantages of NDD Forex brokers are listed below.

• Transparency: NDD brokers provide direct access to the interbank market, offering more transparent pricing.
• No Conflict of Interest: Since they don’t trade against their clients, there’s less potential for a conflict of interest.
• Better Market Prices: Traders often get better bid/ask prices due to the aggregation of prices from multiple liquidity providers.
• Faster Execution: Orders are typically executed more quickly and efficiently, reducing the risk of slippage.
• Variable Spreads: Often result in lower costs during times of high liquidity.

The disadvantages of NDD Forex brokers are listed below.

• Variable Spreads Can Widen: During volatile market conditions, spreads can widen significantly, increasing trading costs.
• Minimum Capital Requirement: These brokers often require a slightly higher minimum deposit compared to Market Makers.
• Less Predictable Costs: Variable spreads make it harder to predict trading costs in advance.

In the NDD model, while the inherent risks of trading remain unchanged, there are specific risks such as spread widening and slippage.

Spread widening in the NDD model occurs because these brokers provide market-based spreads, which can vary significantly depending on the liquidity and volatility in the market. During periods of high volatility or major economic events, the spread – the difference between the bid and ask price – can widen considerably. This widening means higher trading costs for traders, as they pay more to enter and exit trades.

Slippage is another risk inherent in the NDD model. It happens when there is a difference between the expected price of a trade and the price at which the trade is actually executed. This can occur during fast-moving markets or when large orders are placed, and the liquidity at the desired price level is insufficient. Slippage can result in trades being executed at less favourable prices, impacting the profitability of trading strategies.

The best NDD brokers are Pepperstone, Admirals, FP Markets, Vantage, and Dukascopy, which the trading community widely regards as industry leaders. These five brokers earned their elite status through a combination of competitive pricing structures, exceptional execution quality, and robust regulatory oversight across multiple jurisdictions.

• Pepperstone: Pepperstone delivers execution speeds averaging 77ms on limit orders and maintains consistently tight spreads from 0.0 pips through its Razor Account, positioning the Australian broker at the top of most industry rankings for NDD execution quality. The broker earned recognition as 2025 Best Overall Broker and Best MT4 Forex Broker from CompareForexBrokers, confirming its leadership in transparent order processing.
• Admirals: Admirals operates under authorization from four Tier-1 regulators including ASIC and FCA, earning a Trust Score of 93 out of 99, which establishes exceptional trader confidence through its comprehensive regulatory framework. The broker offers over 8,000 tradable instruments across forex, CFDs on indices, commodities, shares, ETFs, and bonds, providing institutional-grade asset diversification that appeals to sophisticated trading strategies.
• FP Markets: FP Markets sources spreads directly from leading liquidity providers without markups and provides superior execution through Equinix servers in New York, delivering the raw spread transparency that cost-sensitive active traders demand. The broker’s Raw Account features spreads from 0.0 pips with commission per lot structures, enabling scalpers and high-frequency traders to access institutional-grade pricing conditions.
• Vantage: Vantage offers three account types including Standard STP, Raw ECN, and Pro ECN accounts with minimum deposits ranging from $50 to $10,000, creating flexible accessibility across different skill levels and capital requirements. The broker’s copy trading platform supports multiple currencies including EUR, HKD, INR, JPY, and USD with multi-account type compatibility, empowering novice traders to leverage experienced strategies while maintaining their preferred trading conditions.
• Dukascopy: Dukascopy Bank operates under Swiss Financial Market Supervisory Authority FINMA regulation as both a bank and securities firm, providing ECN spot forex liquidity through connections to over 20 major banks. The Swiss marketplace delivers deep liquidity through its SWFX technology with deposit insurance up to CHF 100,000, establishing institutional-style trading conditions that appeal to professional traders seeking premium execution environments.

These five brokers collectively exemplify best-in-class NDD execution through their advanced liquidity aggregation systems, transparent pricing mechanisms, and rigorous regulatory compliance standards. While each broker demonstrates superior technical capabilities and market access quality, traders must evaluate which specific trading platform architecture maximizes these fundamental NDD advantages to optimize their individual execution requirements and strategic objectives.

The best NDD trading platforms are MetaTrader 4, MetaTrader 5, and cTrader, which dominate no dealing desk execution through their market-access efficiency, analytical depth, and widespread user adoption across 80+ financial institutions and millions of active traders globally.

• MT4: MetaTrader 4 maintains enduring popularity through its vast plugin ecosystem featuring over 25,000 custom indicators, scripts, templates, and Expert Advisors that create unmatched versatility for algorithmic trading strategies. The platform delivers stable performance with 30 built-in technical indicators and 9 timeframes, while third-party developers continue expanding its functionality through hundreds of specialized add-ons that enhance risk management, order execution, and market analysis capabilities.
• MT5: MetaTrader 5 offers multi-asset capability spanning forex, stocks, commodities, futures, and cryptocurrencies through its modernized interface that features 21 timeframes compared to MT4’s 9 options. The platform includes built-in depth-of-market display with Level II pricing that shows bid-ask spreads across multiple price levels, while its 38 technical indicators and advanced charting system earned it recognition as “Best Multi-Asset Trading Platform” at Money Expo Colombia 2025.
• cTrader: cTrader provides institutional-style Level II order book access with complete market depth visibility that displays available volumes for each price level in real-time through its Volume Weighted Average Price execution model. The platform delivers sub-millisecond order processing speeds with under 1ms latency to major VPS providers, while its intuitive user interface offers 26 timeframes and advanced order types that appeal to professional traders requiring rapid execution and transparent pricing.

Platform features dictate trading experience through their technical capabilities and execution models, but the ultimate NDD broker decision hinges on trader objectives such as scalping versus swing trading, risk tolerance levels including leverage preferences, and strategy requirements like algorithmic automation or manual analysis. These considerations determine which platform architecture best supports individual trading goals and market approaches.

NDD brokers are a suitable choice for traders at all levels who are looking for a fair and efficient trading environment, but they are particularly favoured by those who rely on quick execution and have a good understanding of the Forex market.

NDD (Non-Dealing Desk) Forex brokers are ideal for traders who prioritize transparency in their trading activities. They provide direct access to a network of liquidity providers, ensuring that traders receive the best available market prices.

Another key advantage of NDD brokers is the speed of trade execution. Since orders are passed directly to liquidity providers, trades are executed swiftly, minimizing the risk of slippage – a crucial factor for traders engaging in strategies that rely on fast and precise execution.

Moreover, NDD brokers are often preferred by experienced traders who value tight spreads and access to deep liquidity. These features are especially beneficial for high-volume traders, such as day traders and scalpers, who need to quickly enter and exit positions to capitalize on small price movements.

Additionally, NDD brokers typically offer a range of advanced trading platforms and tools, catering to the needs of sophisticated traders who require comprehensive analytical and automated trading options.