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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