Brokerage Models Explained: Dealing Desk vs. No Dealing Desk—What’s Best for Your Forex Business?

Let’s say you wanted to open a restaurant. 

Now, you’ve got two options. Option one? You’re the chef, the maître d', and the owner—you plan the menu, serve each dish, and keep everything under your roof. Option two? You ditch the kitchen and instead run a sleek self-service gourmet food court where customers choose from a variety of vendors. 

Both setups feed people, but the business models? Night and day. 

Welcome to the world of Dealing Desk (DD) vs No Dealing Desk (NDD) brokerages—two very different approaches to running your forex restaurant… ahem, brokerage. One puts you behind the counter. The other turns you into a transparent, streamlined connector. So, which model will best serve your clients (and your bottom line)? Let's break it down. 

Option 1: The Dealing Desk (DD) – You’re the Chef AND the Kitchen 

In this model, you run the whole show. A Dealing Desk broker, also known as a Market Maker, takes the other side of the trade. That means your brokerage is not just facilitating orders—it's actively involved in the trading process. 

How it Works: 

• You set your own prices (you make the market). 

• Trades are executed internally, or matched with other clients. 

• You profit from spreads, and sometimes, client losses. 

Pros: 

• Fixed spreads = predictable trading costs for clients. 

• Guaranteed execution = even in volatile markets, trades go through. 

• No need for external liquidity = ideal if you want more control. 

Cons: 

• Conflict of interest – since you profit when clients lose, trust becomes a tricky dance. 

• Requotes and slippage – you control the pricing, which can lead to trade rejections in fast-moving markets. 

• Regulatory scrutiny – some traders may be skeptical of transparency. 

Revenue Model: 

• Primarily through spreads (fixed or marked up). 

• Potential revenue from clients’ unprofitable trades. 

Best For: 

• Brokerages targeting beginner traders. 

• Firms looking to offer fixed costs and low trade sizes. 

• Those with risk management teams to handle exposure. 

Option 2: No Dealing Desk (NDD) – The Transparent Buffet Model 

Here, you’re not cooking anything. You're simply giving clients access to the best dishes from top chefs (aka liquidity providers). NDD brokers pass trades directly to external sources—either via STP (Straight Through Processing) or ECN (Electronic Communication Network). 

 How it Works: 

• Client orders are passed directly to banks or other liquidity providers. 

• Pricing is determined by market conditions, not the broker. 

• No position is taken against the client—ever. 

 Pros: 

• Real market pricing – tight spreads based on supply and demand. 

• No conflict of interest – traders trust you more. 

• Faster execution – especially with ECN setups. 

Cons: 

• Variable spreads – costs can fluctuate during volatile sessions. 

• Commission fees – may be charged per trade. 

• Higher minimum deposits or trade sizes – not always beginner-friendly. 

Revenue Model: 

• Small markups on spreads or commissions per trade. 

• No dependence on client losses—only volume matters. 

 Best For: 

• Brokerages targeting experienced or high-volume traders. 

• Firms that want to build long-term trust. 

• Businesses that have strong tech infrastructure to connect with multiple LPs. 

So, Which Brokerage Model Should You Choose? 

Here’s the juicy part. Let’s lay out the real decision-makers: 

Cost Structure 

• DD: Fixed spreads make revenue predictable, but risk is internal. You need capital reserves and risk management. 

• NDD: You earn from volume, not volatility. Revenue can be lower per trade, but there's no exposure risk. 

Technology Infrastructure 

• DD: Requires internal dealing software and risk mitigation tools. 

• NDD: Needs strong APIs and a robust connection to liquidity providers. STP/ECN models thrive on tech efficiency. 

Target Clientele 

• DD: Ideal for new traders who want a stable, simple interface. 

• NDD: Perfect for savvy traders who demand transparency, real-time pricing, and rapid execution. 

Scalability 

• DD: More scalable early on if you control costs well—but requires more regulatory compliance. 

• NDD: Scales with volume, but you’ll need a tech team to maintain integrations and pricing flow. 

Final Takeaway: What’s On Your Menu? 

Both models can serve you well—it depends on what kind of forex "restaurant" you want to run. 

Want control, stable spreads, and simplicity? Set your own kitchen up with a Dealing Desk. 

Crave transparency, real-time execution, and a trusted trader experience? Open the doors to a No Dealing Desk. 

At FXBO, we support brokers no matter the setup. Whether you’re running the kitchen or managing the buffet, our CRM solutions plug in seamlessly—offering automated workflows, lead management, and performance analytics that keep you one step ahead of the market.