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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Electronic communications networks (ECNs), however, represent an emerging band of competitors.
The Council will review the draft directive aimed at ensuring a high level of security of electronic communications networks and information systems in the EU.
--establish and operate electronic communications networks, acquire the rights to use these networks or buy existing infrastructures and networks to be made available to operators or users of independent networks;

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