ECN

ECN (1)

Electronic Communications Network. Defined under Rule 11Ac1- 1(a)(8) under the U.S. Securities Exchange Act of 1934.

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ECN (2)

See: Emerging company marketplace

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Electronic Communication Network

A computer system that facilitates over-the-counter trading as well as exchange trading. The electronic communication network sends buy or sell orders to the appropriate specialiston the floor of a stock exchange, bypassing the floor broker. A company running an ECN charges a fee for its services.

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ECN

See electronic communications network.

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Electronic communications network (ECN). An ECN is an alternative securities trading system that collects, displays, and executes orders electronically without a middleman, such as a specialist or market maker.

Trading on an ECN allows institutional and individual investors to buy and sell anonymously. Further, ECNs facilitate extended, or after-hours, trading.

ECN trade execution can be faster and less expensive than trades handled through screen-based or traditional markets, though the volume is sometimes thin.

However, some ECNs have been approved for official stock exchange status, expanding the number of stocks that can be traded on their systems.

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Electronic Communication Network (ECN)

What Does Electronic Communication Network (ECN) Mean?

An electronic trading system that attempts to eliminate the role of a third party in the execution of orders entered by an exchange market maker or an over-the-counter market maker and permits such orders to be executed entirely or partly.

Investopedia explains Electronic Communication Network (ECN)

An ECN connects major brokerages and individual traders so that they can trade directly among themselves without having to go through a middle man.

Related Terms:
• Broker-Dealer
• Market Maker
• Over the Counter—OTC
• Nasdaq
• Stock Market