Execution & Liquidity
A Transparent Execution Model Aligned With Our Customers
We believe that your broker should be on your side. That’s why at Zenfinex we are proud to deliver a fully transparent Straight through Processing (STP/ECN) or No Dealing Desk (NDD) execution model to our traders.
- Complete Trade Anonymity
- No Manipulation of Price
- All Trading Strategies Welcome
- Increased Transparency
- Stops and Limits Hidden from Liquidity Providers
- Deep Liquidity at the Top of Book
- Institutional Pricing Available
- No Conflict of Interest
- No Requotes
- Aggregated Liquidity
Zenfinex offers a best bid, best offer system that aggregates multiple liquidity providers including global banks and other financial institutions. By taking the best available buy and sell prices from these providers, we aggregate them together and then stream the lowest possible price to our clients. By constantly providing deep pools of liquidity, our traders can have confidence that even the largest orders are filled fairly and anonymously. Our revenue is derived from a small markup on our aggregated wholesale feed ensuring our prices are both market driven and fair.
There is no conflict of interest between Zenfinex and our traders which creates a fully transparent marketplace and trading experience. By immediately matching our clients trades with liquidity providers our traders can have peace of mind that we hold no market risk, are on their side and hold no restrictions on trading strategies.
What is Execution?
Every time a trader places an order to enter or exit a trade there has to be a price provider or counterparty to provide execution of that order. Just like any marketplace, for every ‘buy’ trade there has to be a seller willing to sell at a specific price and for every ‘sell’ trade there has to be a buyer willing to buy at a specific price.
By matching a buyer and a seller there is a ‘trade’ that is executed at that specified price. Price / liquidity providers are also known as ‘market makers’. Their job is to stream prices and liquidity to the marketplace in order for traders to execute trades at the overall executed price.
There are two execution models available in FX and CFD’s – Dealing Desk (Market Making) or No Dealing Desk (STP ‘Straight through Processing’ or ECN ‘Electronic Communications Network). Zenfinex is a No Dealing Desk as it holds an FCA Matched Principal Licence.
How does Zenfinex generate its revenue?
Zenfinex receives prices from multiple liquidity providers who stream us a competitive aggregated rate at the interbank market rate. Zenfinex adds a small mark-up to the base rate and/or charges a separate commission to clients.
The more our clients trade, the more revenue that is generated. It is in Zenfinex’s interests to educate clients to become better traders as they are more likely to be successful and trade more volume. It is possible to familiarise yourself more with Zenfinex’s spreads to get an idea of the spread benefits available to clients.
Who are Zenfinex's market makers / liquidity providers?
Zenfinex holds a Matched Principal licence with the FCA therefore doesn’t make markets or operate an internal dealing desk like other brokers who may operate using a Market Maker or Principal licence. When a broker has a Principal license they set the prices and take the other side or Market Make / B-Book their client’s trades.
Alternatively, Zenfinex immediately match our clients trades with third party liquidity providers meaning we take absolutely zero market risk also known as an A-Book brokerage. By sourcing our prices / liquidity from third party providers, we are not trading against our clients and act on an ‘Execution Only’ basis.
Zenfinex’s price providers are a mixture of Tier 1 banks, hedge funds and non-bank financial institutions. All our liquidity providers are thoroughly screened, regulated and have healthy balance sheets.
What is Straight Through Processing or No Dealing Desk Execution?
Straight Through Processing (STP or ECN) and No Dealing Desk are similar in nature. Both terms essentially mean that there is no dealing or trading internally against clients (making markets) therefore holding no market risk against clients. As Zenfinex is not a Dealing Desk, we immediately match our clients trades back to back with a handful of third party liquidity providers. Our clients trades and orders are routed through a best bid, best offer engine to be executed at the fairest price available aggregated from numerous liquidity providers. Our price providers compete for our clients trades so it is in their interests to stream the most competitive price available so they win the business.
A major advantage of No Dealing Desk execution is that there are no requotes or dealer intervention. There is a vast liquidity pool available therefore even the largest trades can be filled / executed at competitive prices under normal market conditions. All trading strategies are welcome with Zenfinex, including news traders, scalpers and expert advisors (EA’s) or other trading black boxes / algorithms.
What is a Dealing Desk?
A Dealing Desk broker is one that makes the prices (market maker) on their platform and holds the market risk against the client. When a client buys into a trade, the broker sells and vice-versa. This creates a conflict of interest as the broker typically makes money when the client loses and vice-versa. A trader that is successfully generating profit will hit the brokers profits as they sit on the opposite side of the trade. As a result, traders generating a profit are toxic for a Dealing Desk broker. Toxic strategies include scalpers (those trading in and out of the market quickly within seconds), news traders and automated traders.
A Dealing Desk broker has the ability to manipulate pricing in their favour as they set the price. They can also requote a difference price upon execution or consistently execute the price at a completely different level seen on the trading platform. Zenfinex believes this is not the fairest way of providing a market place and puts a retail trader at a disadvantage.
Zenfinex is not a Dealing Desk broker. The company holds a Matched Principal licence with the FCA which means we act as an ‘Execution Only’ trading venue. Simply put, all trades generated by Zenfinex traders are sent straight through to third party providers who compete on pricing in the hope of winning our traders business thus executing their traders. Zenfinex therefore acts as the middle man and collects a small mark-up on a wholesale price or charge a separate commission. We believe this is the most transparent way of operating a broker and pridefully pass on this benefit to our clients.