NDD broker

An NDD broker acts as an intermediary, passing client orders directly to external liquidity providers, such as banks or other financial institutions. They do not operate a dealing desk or take the opposite side of a client's trade. This model prevents potential conflicts of interest between the broker and the trader by ensuring transparent execution and true market pricing. The broker profits through a small commission or by adding a slight markup to the raw spread received from liquidity providers.

For retail traders, NDD brokers typically offer tighter spreads, sometimes as low as 0.1 pips on major pairs, but often charge a commission per lot traded (e.g., $7 per standard lot round turn). This model aims to reduce requotes and slippage, especially during volatile market conditions, as orders are matched directly in the interbank market. Traders benefit from direct access to a pool of liquidity, potentially leading to faster and more reliable order fills.