ELECTRONIC COMMUNICATION NETWORK

Those computer systems which provide the facility of trading for financial product outside the exchanges are commonly known as electronic communication networks in online stock trades markets. Most commonly trading items on ECN are currency trading and online stock trading. ECNs were established in 1998 when authority was granted by the SEC. Because of lowering of transactional cost, competition has been increased in online stock trades. ECN of online stock trades presents complete access of their order book to the clients and also facilitates with the features of order matching even after the traditional timings of online stock trades exchange.
For using ECN, a trader of online stock trades must have an account with the online stock trades’ broker to get the access of direct trading. For placing order, subscriber of ECNs can use any computer or networking protocol. After the placement, ECN will check out their contra-end and then make the execution. In ECN online stock trades, contra-end is referring as opposite order of same price and same amount.
Fees structure of ECN online stock trades is categorized in two ways; Classic structure and Credit structure. Both of the fee structures have their own distinct features. Classic structure attracts the liquidity removers while liquidity providers feel the attraction in credit structure. However, for accessing these fee structures, providers and removers must have their own market value in online stock trades.
Some FX electronic communication networks also provide access to electronic networks. Matching engine provides the limitation check and order checking in less than hundred ms on one trade of online stock trades. The order book of ECN of online stock trades is not like routing systems which forward the order to each individual; it works like an exchange of online stock trades which act against the best bid.