ECN
Definition
Electronic Communication Network. An electronic system that brings buyers and sellers together for the electronic execution of trades. It disseminates information to interested parties about the orders entered into the network and allows these orders to be executed. Electronic Communications Networks (ECNs) represent orders in NASDAQ stocks; they internally match buy and sell orders or represent the highest bid prices and lowest ask prices on the open market. The benefits an investor gets from trading with an ECN include after-hours trading, avoiding market makers (and their spreads), and anonymity (which is often important for large trades).
Use ECN in a sentence
“ I wanted to be part of the ECN because I thought it was a really cool way to participate in trading. ”
“ The ECN allowed easy communication between independent buyers and those who wished to offer shares of their stocks for sale so that a new era in trading was started. ”
“ The rise of the ECN has greatly reduced costs to individual and institutional investors, mainly by increasing competition between broker dealers via effective order dissemination. ”
