Definition
No Dealing Desk (NDD) / A-Book is an order routing model where the broker passes client orders directly to external liquidity providers (LPs) without acting as the counterparty. The broker's revenue comes from commissions or markups on the spread, not from client losses. This structural separation between the broker's profit and the client's trading outcome is the defining characteristic of the A-Book model.
In an NDD environment, the broker functions as an intermediary and technology provider rather than a market maker. Orders are routed through a bridge or gateway to one or more LPs, who provide executable quotes. The execution occurs at the LP level, with the broker facilitating connectivity, aggregation, and order management.
What It Is / What It Is Not
What NDD / A-Book IS
- Orders routed to external liquidity providers (LPs)
- Broker earns from commissions or spread markup, not client losses
- No structural conflict of interest between broker and client
- Execution quality depends on LP relationships and technology
- Price discovery happens at the LP / venue level
- Supports both single-LP and multi-LP (composite) configurations
What NDD / A-Book IS NOT
- Not a guarantee of best execution or zero slippage
- Not always commission-free (some brokers add markup instead)
- Not immune to requotes, rejects, or last look from LPs
- Not necessarily ECN -- ECN is a venue type, NDD is a routing model
- Not a regulatory classification -- it describes operational structure
- Not exclusive to institutional brokers; retail brokers can operate A-Book
Where It Appears in the Execution Stack
In the execution stack, NDD / A-Book routing sits between the client order and the liquidity venue. The typical flow is:
The broker does not warehouse risk in this model. The market risk is transferred to the LP upon execution. The broker retains technology risk (gateway uptime, bridge latency) and credit risk (client margin management).
Benefits & Trade-offs
| Factor | Detail | |
|---|---|---|
| Conflict of interest | No structural conflict -- broker does not profit from client losses | |
| Transparency | LP sources, routing logic, and execution metrics can be disclosed | |
| Spread stability | Spreads reflect real market conditions; may widen in volatility | |
| Execution speed | Depends on LP response times, bridge latency, and network hops | |
| Slippage profile | Both positive and negative slippage possible; reflects market reality | |
| LP rejections | LPs may reject or requote, especially during high-volatility periods | |
| Fixed spread offering | Difficult to offer fixed spreads since pricing comes from external LPs |
Common Marketing Claims vs Reality
| Claim | Reality |
|---|---|
| "We are 100% NDD" | Verify by checking if the broker publishes LP sources, execution policy, and order routing documentation. |
| "Zero conflict of interest" | Structurally reduced, not zero. Markup-based models still incentivize volume; hedging decisions on residual risk matter. |
| "Direct market access" | True DMA means orders hit LP order books directly. Many "DMA" claims actually describe STP routing through a bridge. |
| "No requotes ever" | LPs can reject orders, apply last look, or return different prices. The broker's bridge settings determine what the client sees. |
What to look for in an Execution Policy
- Does the execution policy name specific LP categories (bank, non-bank, ECN)?
- Is the order routing path documented (client → bridge → LP)?
- Does the broker disclose whether it uses last look or firm liquidity?
- Are execution statistics published (fill rates, slippage distribution)?
- Is the conflict of interest mitigation explicitly described?
- Does the policy distinguish between commission and markup revenue models?
See a Public Routing Disclosure Example
NDD.broker publishes detailed order routing and execution policy documentation, including LP composition, priority logic, and conflict mitigation. This serves as a reference implementation of the concepts described above.
Educational content only. This is not financial advice. Always consult qualified professionals before making trading decisions.