Electronic Communication Network (ECN)

ECN stands for Electronic Communication Network. It is an automated system that connects buyers and sellers directly, enabling them to trade securities, such as stocks and currencies, without the need for intermediaries such as brokers.

ECNs operate by providing a platform that aggregates buy and sell orders from multiple market participants, including retail traders, institutional investors, and market makers. The ECN then matches the buy and sell orders based on price and volume, and executes trades automatically.

One of the key benefits of ECNs is that they offer transparency and anonymity to traders. All orders are displayed in real-time, allowing traders to see the depth of the market and make more informed trading decisions. Additionally, traders can execute trades without revealing their identity, which can help to prevent price manipulation and other unethical trading practices.

ECNs also typically offer lower transaction costs than traditional brokerage firms, as they do not charge markups on the spread or commissions on trades. However, traders may be required to pay a subscription fee or other fees to access the ECN platform.

Overall, ECNs have become an important part of the financial markets, particularly for high-frequency traders, day traders, and other active investors who require fast and efficient trade execution.

On this page, we list brokers and exchanges that adopt Electronic Communication Network (ECN) model to provide the service.