What is the electronic communications network?
The electronic communications network or ECN is the name given for trading platforms that automatically match customers’ buy and sell orders at stated prices.
These stated prices are gathered from different market makers, banks, and even other traders who use the ECN.
Whenever a certain sell or buy order is made, it is matched up to the best bid/ask price out there.
Due to the ability of traders to set their own prices, ECN brokers typically charge a tiny commission for the trades you take.
The combination of tight spreads and small commissions usually makes transaction costs cheaper on ECN brokers.
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