electronic communications network

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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 specialist on the floor of a stock exchange, bypassing the floor broker. A company running an ECN charges a fee for its services.

electronic communications network (ECN)

A computerized trading network that matches buy and sell orders entered electronically by customers. Orders that cannot be immediately matched are posted for viewing by investors who may wish to take an offsetting position. Instinet became the first ECN when it started business in 1969. Archipelago and Island are two other large electronic communications networks. One study indicated that in January 2001 ECNs handled over 50% of all Nasdaq transactions.

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.

References in periodicals archive ?
a new electronic communications network (ECN) for the financial services community, has chosen SAVVIS to serve as its financial network and hosting platform.
DEx users are able to access Pipeline directly through SonicPort(SM), DEx's front-end execution management system that provides direct market access to all market centers for both listed and over-the-counter equities, smart routing and advanced order types, and full depth of electronic communications network (ECN) book display.
By connecting clients directly to each trading venue, whether an exchange or electronic communications network, and bypassing Reuters datacenters entirely, Reuters Data Feed Direct reduces the data latency by several critical tenths of a second when compared with traditional consolidated feeds.
The rise of electronic communications networks (ECNs) has brought new competition and uncertainty to the securities markets.
Electronic communications networks (ECNs), however, represent an emerging band of competitors.

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