Published: September 23, 2026 · Last reviewed: September 23, 2026

Every retail CFD trade goes through a hidden ecosystem of banks, electronic market-makers, and specialist venues that most brokers never explain. Understanding how your broker actually gets its prices is the difference between paying a real cost and paying a marked-up one.

The same EUR/USD price appears on five broker platforms simultaneously. Yet the same 0.5-pip move off a 1.1-pip spread can be worth $50 or $150 depending on which broker you chose. That spread is not a mystery — it is a stack of fees, markups, and liquidity-provider quotes that this guide walks through.

The three main models are STP (Straight-Through Processing), DMA (Direct Market Access), and market-maker. A fourth — raw-spread with commission — is technically STP with a different cost structure. UZFX operates on the point-spread standard-account model, and understanding why the point-spread model works the way it does requires understanding the models underneath it.

This guide is a technical explainer. If you want the practical comparison after reading it, our CFD trading costs: spread, commission, swap, slippage walks through the numbers on five brokers.

Where the Price Actually Comes From

The “spot price” of EUR/USD is not one thing. It is the aggregate of a few hundred thousand orders per second across the interbank market, split into three layers:

Layer 1: Central banks and sovereign funds. The Bank of England, the ECB, the US Treasury, and central banks of major reserve currencies provide liquidity directly at specific bid-ask prices to their counterparties.

Layer 2: Tier-1 banks. Citi, JPMorgan, Deutsche Bank, UBS, Goldman Sachs, and Barclays provide 24-hour liquidity to their institutional clients, including hedge funds, asset managers, and prime brokers.

Layer 3: Electronic liquidity providers and venue operators. ICE, LMAX, Currenex (now part of ICE), BGC, and various specialist ETPs provide retail-facing liquidity. Retail CFD brokers connect here.

Your CFD broker sits below Layer 3. It aggregates multiple LP quotes and either passes the best to you (STP), blends them (aggregation STP), or holds them internally and marks them up (market-maker).

The Three Broker Models, In Detail

1. STP (Straight-Through Processing)

An STP broker is not the counterparty to your trade. Your order is routed electronically, without manual intervention, to one or more external liquidity providers. The LP fills the trade at their quoted price, plus a broker markup.

Characteristics:

  • The broker is not on the order book.
  • The client’s counterparty is the LP.
  • Spreads are typically wider (1.5-2.5 pips EUR/USD) but do not include a commission.
  • The broker revenue is the spread markup only.
  • Common examples: UZFX (standard account), AvaTrade, and most retail-focused brokers.

Why brokers like this: simpler risk management, no need to hedge, no balance-sheet exposure to client trades.

Why traders like this: a single spread cost, easy to compare across brokers.

2. Raw-Spread STP with Commission

A hybrid of STP that offers tighter spreads plus a per-lot commission. The client pays the near-wholesale spread plus a commission that is $3-7 per side on standard lot sizes.

Characteristics:

  • The broker is still not the counterparty.
  • Spreads are tighter (0.0-0.5 pips EUR/USD) but a $3-7 commission per side adds to the cost.
  • Total round-turn cost is often $20-30 per standard lot, versus $25-35 on a standard STP account.
  • Common examples: IC Markets Raw Spread, Pepperstone Razor, Tickmill Raw, Exness Raw Spread.

Why brokers like this: appeals to algorithmic traders and scalpers who want tighter spreads and are willing to pay a commission.

Why traders like this: the effective cost can be lower on high-frequency trading (more than ~20 trades per day).

3. DMA (Direct Market Access)

DMA brokers route orders directly to an exchange or off-exchange trading venue. The client is the counterparty to the venue itself, not to a bank. This is the closest thing to institutional trading a retail broker offers.

Characteristics:

  • Orders reach the venue order book directly.
  • Spreads reflect real exchange liquidity — can be very tight during London/NY overlap, wide during Asian session.
  • Common examples: FXCM (on some account types), Tradegate FX access via some brokers, IG’s exchange-traded CFDs.

Why brokers like this: appeals to institutional and semi-institutional clients, higher compliance but higher perceived quality.

Why traders like this: real liquidity, no broker markup, direct market visibility.

Trade-off: higher minimum deposits (typically $10,000+), higher fees, and much of the “zero spread” is priced into execution quality (more slippage, more fills at bad prices during fast markets).

4. Market-Maker

The market-maker broker is the counterparty to your trade. The broker’s internal risk desk hedges the exposure, usually with tier-1 banks. If you lose, the broker wins; if you win, the broker loses.

Characteristics:

  • The broker is the counterparty on the order book.
  • Spreads can be very tight (0.5-1.0 pips) but the broker may reprice in fast markets.
  • Higher risk of requotes during volatile conditions.
  • The broker’s profitability is directly correlated with retail losing rates.

Why brokers like this: revenue is not just commission but also the statistical edge against retail. Historically a common model but has declined due to regulatory scrutiny.

Why traders like this: some traders prefer the certainty of a tight spread during quiet hours, even if they accept higher requote risk.

Trade-off: less transparency, more potential for execution issues during news.

How the Spread Actually Gets Set

The retail spread is a stack of markups. Reading from top to bottom:

  1. The LP’s bid-ask spread. Tier-1 banks charge an effective 0.1-0.3 pips spread for a standard retail-sized order (20,000 EUR, 0.2 lot).
  2. The aggregator venue markup. LMAX or similar venue operators add 0.05-0.15 pips.
  3. The broker’s markup. The broker adds 0.3-1.5 pips depending on the account type. On a “standard” STP account, the markup can be 0.8-1.5 pips. On a “raw spread” account, the markup is minimal (0.05-0.15 pips) but a commission is charged instead.

The total stack for a standard STP broker on EUR/USD is typically 1.1-1.8 pips. For a raw spread broker, the effective total is spread + commission = 0.5 + $7 = about 1.5 pips equivalent at current EUR/USD prices.

This is why a broker advertising “raw spreads from 0.0 pips” is still costing you about the same as a broker advertising “spreads from 1.0 pips.” The math works out when you include the commission.

How UZFX’s Point-Spread Model Fits In

UZFX operates on the standard STP point-spread model:

  • Standard account: 1.0-1.4 pips EUR/USD, no commission.
  • Raw spread account: not offered.
  • Commission: $0 on all accounts.
  • Leverage: up to 1:100 for retail under ASIC AFSL 001291473.
  • Minimum deposit: $10.

The math for a standard EUR/USD trade on 1 lot (100,000 EUR):

  • Spread: 1.2 pips × 10 = $12 round-turn cost (assuming bid-ask).
  • Commission: $0.
  • Total: $12 per round turn per standard lot.

Compare to IC Markets Raw Spread:

  • Spread: 0.2 pips × 10 = $2.
  • Commission: $3.50 per side × 2 = $7.
  • Total: $9 per round turn per standard lot.

The raw spread broker is marginally cheaper on EUR/USD. But on less liquid pairs, UZFX’s point-spread model can win: UZFX spreads on USDCAD are 1.8 pips with no commission ($18 round-turn), versus IC Markets at 0.5 pips + $7 = $12 round-turn. The raw spread broker still wins, but the gap narrows on illiquid pairs.

The real advantage of UZFX is not spread competitiveness on major pairs — it is the $10 minimum deposit and the absence of commission complexity. A $100 account trading EUR/USD with 0.01-lot lots has $0.12 round-turn cost on UZFX, versus $9 commission on IC Markets, which is $0.90 per 0.01-lot trade. UZFX is 7.5x cheaper for micro accounts.

The Prime Broker Layer Most People Miss

Between a tier-1 bank and a retail aggregator sits another layer: the prime broker. Prime brokers include Morgan Stanley Prime Services, UBS Prime Brokerage, Goldman Sachs Prime Services, and specialist desks at smaller banks.

A retail CFD broker often does not connect to tier-1 banks directly. Instead, it connects to prime brokers, which then connect to tier-1 banks. This adds another 0.05-0.10 pip to the stack but keeps the retail broker’s tech requirements low.

Some retail brokers advertise “direct bank liquidity” as a differentiator. The truth is that nearly all retail brokers get their prices from prime brokers or aggregator venues. The “direct bank” claim is more marketing than reality.

How to Test Whether Your Broker Is STP or Market-Maker

Three quick tests at the trading desk:

Test 1: The 20:00 UTC NY Close test. At 16:00 ET (20:00 UTC), liquidity drops as the New York market winds down. STP brokers widen spreads by 1-2 pips. Market-maker brokers hold their spread tight. If your broker’s spread does not move at 20:00 UTC, it is probably a market-maker.

Test 2: The FOMC release minute test. During a Fed decision at 22:00 UTC, liquidity becomes extreme for 60 seconds. STP brokers widen spreads by 3-6 pips. Market-makers widen by 1-3 pips. If your broker’s spread moves 4+ pips during a release, it is STP.

Test 3: The Asian session illiquid-pair test. On USDCAD or NZDJPY during the Asian session (23:00-05:00 UTC), liquidity is thin. STP brokers widen by 2-4 pips. Market-makers widen by 1-2 pips or requote.

Run these three tests over a month and you will know what kind of broker you are trading with.

What Slippage Tells You

Slippage is the difference between the price you clicked and the price you got. On a stable market, STP brokers show 0-0.5 pips slippage. On a fast market, STP shows 0.5-2 pips. Market-makers can requote entirely (you see a price change between click and confirmation) or slippage by 2-4 pips.

UZFX reports 0.4-0.8 pips average slippage on EUR/USD during FOMC weeks. IC Markets reports 0.2-0.5 pips. Pepperstone reports 0.1-0.3 pips on their institutional feed. The gap has narrowed but the top-tier raw spread brokers still have an execution-quality edge on institutional-grade feeds.

Why the Model Matters to Your P&L

Over 6 months of active trading, the cost model matters more than the spread:

Scenario A: 100 trades per month, 0.05 lots, EUR/USD.

  • Standard STP ($12 per lot round-turn): $6 per trade × 600 trades = $3,600 over 6 months.
  • Raw spread ($9 per lot round-turn): $4.50 per trade × 600 trades = $2,700 over 6 months.
  • Market-maker with requote on 5% of trades: assume $15 equivalent requote cost = $3,825 over 6 months.

Scenario B: 20 trades per month, 0.5 lots, EUR/USD.

  • Standard STP: $60 per trade × 120 = $7,200 over 6 months.
  • Raw spread: $45 per trade × 120 = $5,400 over 6 months.
  • Market-maker: $65 per trade × 120 = $7,800 over 6 months.

The gap between models is $1,800-$2,400 over six months on active trading. On a $5,000 account, that is 36-48% of the account in friction over six months. It is real money.

How UZFX Compares on Total Cost

UZFX standard account, 0.05 lot EUR/USD, 100 trades per month, 6 months:

  • Spread: 1.2 pips × 5 = $6 per trade.
  • Commission: $0.
  • Total: $3,600 over 6 months.

This is competitive with the standard STP benchmark but not with raw spread brokers on a per-trade basis. The advantage of UZFX is:

  • $10 minimum deposit (IC Markets $200, Pepperstone $0 but practical minimum $200).
  • No commission complexity.
  • One cost number to track, not two.
  • 100+ instruments (most brokers on par, but UZFX’s crypto CFD range at $0 commission is distinctive).

For traders who open 10-30 trades per month with a $100-$500 account, UZFX’s cost model is efficient. For traders doing 100+ trades per month with a $5,000+ account, the raw spread brokers are cheaper per trade.

FAQ

Q: What is the difference between STP, DMA, and market-maker brokers? A: An STP broker routes orders directly to external liquidity providers without holding client money against the position. A DMA broker routes orders to an exchange. A market-maker broker acts as the counterparty to your trade.

Q: Who is the actual liquidity provider behind a CFD broker? A: Liquidity providers are typically tier-1 banks, institutional market-makers, or specialist electronic trading venues. Brokers aggregate multiple LP quotes and pass the best or blended price to retail.

Q: Do brokers mark up the price you see? A: Usually no, but some brokers mark up or widen spreads dynamically. UZFX advertises a point-spread model with zero commission, so the total cost is the spread only. Raw-spread brokers (IC Markets, Pepperstone) show a tighter spread plus a per-lot commission.

Q: How does the spread actually get set? A: Liquidity providers charge brokers a small bid-ask cost. Brokers mark this up slightly to cover operations and generate revenue. The retail spread is typically 1.5-2.5x the wholesale spread at the source.

Q: How can a retail trader test whether their broker is STP or market-maker? A: Compare the EUR/USD spread at 15:00 London open, 20:00 NY close, and 22:30 release minutes across three brokers. Brokers that widen more during releases are aggregating a thinner book of LPs. Brokers with raw spreads and tight execution during releases have deeper LP connections.

The Verdict

The broker-liquidity ecosystem is deeper than most retail traders understand. The three models — STP, raw spread STP, and market-maker — each have their own cost profile. The “cheapest broker” is not always the cheapest on the surface spread; it is the cheapest on the total round-turn cost including commission and slippage.

For most retail traders on small accounts, UZFX’s point-spread standard account is the practical choice: one cost number, no commission to manage, $10 minimum, and enough execution quality for active but not algorithmic trading. For traders doing 100+ trades per month on larger accounts, the raw spread brokers with institutional-grade LP connections have the edge.

You can verify UZFX’s ASIC AFSL 001291473 at ASIC’s register of regulated entities.

Recommended Broker: Visit UZFX Official Website

Risk Disclaimer

Trading CFDs involves significant risk and may not be suitable for all investors. You could lose more than your initial investment. Past performance is not a reliable indicator of future results. This article is for educational purposes only and does not constitute financial advice. Always perform your own research and consult a licensed financial advisor before making investment decisions. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68-74% of retail investor accounts lose money when trading CFDs with a provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Further Reading

Last reviewed: September 23, 2026. Prices quoted reflect typical ranges as of September 2026 and may vary by account tier and market conditions. Not investment advice.

Editorial team: MarketCFD research desk. Regulation verification: ASIC AFSL 001291473. For more broker-level comparisons, see Top 10 Regulated Forex Brokers 2026.