NDD vs Dealing Desk
This is the most important distinction in broker execution models. NDD brokers route orders to external liquidity, while Dealing Desk brokers handle orders internally. The difference has profound implications for transparency, conflict of interest, and execution quality.
| Dimension | NDD (No Dealing Desk) | Dealing Desk |
|---|---|---|
| Order handling | Routed directly to external LPs without intervention | Processed internally by the broker's dealing desk |
| Counterparty | External liquidity provider(s) | The broker itself |
| Conflict of interest | Eliminated — broker earns from commission/markup regardless of client outcome | Inherent — broker profits when client loses |
| Revenue model | Commission per trade and/or transparent spread markup | Spread capture, client losses, and internal book management |
| Price source | Aggregated from multiple external LPs | Set internally, often with a single reference |
| Requotes | None — orders fill at market price or experience slippage | Common during volatile conditions |
| Slippage symmetry | Symmetrical — both positive and negative | Often asymmetrical — predominantly negative |
| Transparency | Can publish execution metrics without self-incrimination | Metrics disclosure would reveal conflict of interest |
| Stop hunting risk | Structurally impossible — prices come from external markets | Possible — broker controls pricing |
| Best for | Traders who value transparency, fairness, and verifiable execution | Micro-account traders who prioritize guaranteed fills over fairness |
Order handling
NDD (No Dealing Desk)
Routed directly to external LPs without intervention
Dealing Desk
Processed internally by the broker's dealing desk
Counterparty
NDD (No Dealing Desk)
External liquidity provider(s)
Dealing Desk
The broker itself
Conflict of interest
NDD (No Dealing Desk)
Eliminated — broker earns from commission/markup regardless of client outcome
Dealing Desk
Inherent — broker profits when client loses
Revenue model
NDD (No Dealing Desk)
Commission per trade and/or transparent spread markup
Dealing Desk
Spread capture, client losses, and internal book management
Price source
NDD (No Dealing Desk)
Aggregated from multiple external LPs
Dealing Desk
Set internally, often with a single reference
Requotes
NDD (No Dealing Desk)
None — orders fill at market price or experience slippage
Dealing Desk
Common during volatile conditions
Slippage symmetry
NDD (No Dealing Desk)
Symmetrical — both positive and negative
Dealing Desk
Often asymmetrical — predominantly negative
Transparency
NDD (No Dealing Desk)
Can publish execution metrics without self-incrimination
Dealing Desk
Metrics disclosure would reveal conflict of interest
Stop hunting risk
NDD (No Dealing Desk)
Structurally impossible — prices come from external markets
Dealing Desk
Possible — broker controls pricing
Best for
NDD (No Dealing Desk)
Traders who value transparency, fairness, and verifiable execution
Dealing Desk
Micro-account traders who prioritize guaranteed fills over fairness
The Core Difference
At its heart, the NDD vs Dealing Desk distinction is about who sits on the other side of your trade. In NDD, your counterparty is an external institution — a bank, a prime broker, or an ECN participant. The broker is just the technology layer connecting you. In a Dealing Desk model, the broker IS your counterparty. Every time you buy, the broker sells to you. Every time you win, the broker loses. This structural difference cascades through every aspect of the trading experience.
Pricing and Spreads
NDD brokers derive pricing from external LP competition. When 10 LPs compete to offer the best bid and ask, the resulting spread is tight and market-driven. Dealing Desk brokers set their own spreads, often wider than the interbank market to capture more revenue. While DD spreads may appear fixed and stable (which some traders prefer), they include a hidden cost — the broker's profit margin that doesn't exist in competitive NDD pricing.
Execution Fairness
The most measurable difference appears in execution quality data. NDD brokers can demonstrate symmetrical slippage distributions, zero requotes, and transparent rejection rates. Dealing Desk brokers structurally cannot show the same metrics because their execution is designed to manage risk for the broker, not optimize outcomes for the trader. This is why execution transparency is the most reliable test of execution model.
Verdict
NDD execution is structurally superior for any trader who values transparency and fairness. Dealing Desk models may offer certain conveniences (fixed spreads, guaranteed fills on small orders), but at the cost of inherent conflict of interest. The evolution of the industry is clearly moving toward NDD/A-book models as technology makes external routing faster and cheaper.