Your order passed straight down the line:no desk between to redefine.
A model in which a broker passes client orders to outside liquidity providers and has them filled at those providers’ prices, instead of taking the other side itself.
An NDD broker typically earns a commission or a markup on the spread; the label is used loosely in the industry.
In plain words
A dealing desk is the part of a broker that takes the other side of clients’ trades. A non-dealing-desk broker, or NDD broker, describes a model in which client orders are instead passed on to outside liquidity providers, the banks and trading firms that quote prices, and filled at their prices.
See it move
Stage 2 of 3: Broker
Why it matters
The model affects where a broker’s income comes from: an NDD broker typically earns a commission or a markup added to the providers’ spread. The label is used loosely in the industry, so a broker’s order execution policy is the document that says what actually happens to an order.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
The best quotes from an NDD broker’s providers are 1.1000 bid and 1.1001 ask, and the broker adds a markup of half a pip to each side.
- 1Client bid1.10000 − 0.00005 = 1.09995
- 2Client ask1.10010 + 0.00005 = 1.10015
- 3Client spread1.10015 − 1.09995 = 0.00020, or 2 pips
The client sees a 2-pip spread: 1 pip from the providers and 1 pip of markup for the broker.
A common mistake
“No dealing desk” does not mean no cost and no slippage. The order still crosses a spread, and because it is filled at the providers’ current prices, the fill can differ from the price requested.
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Educational information, not investment advice or a recommendation to trade.