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An ECN acts as a pseudo-market maker. It shows bids and offers to the
markeplace. The largest one is Reuter's Instinet. Some brokers allow retail
customers to place bids and offers on it. It is also used a lot by
institutions and market makers because it is anonymous, and can be used to
move stock without revealing the true intent of a market maker. Orders can
also be crossed on an ECN. e.g. you see an offer for a certain price and you
buy at that offer. No order even makes it to the marketplace.
The second largest, and most used by retail customers, is Island, owned more
or less by Datek. Island access is also available through most daytrading
brokerages. There are a half dozen others, Archipelago, Attain, Bloomberg,
and some others.
In a message dated 5/27/99 6:37:25 PM Pacific Daylight Time,
robert.cummings@xxxxxxxxxxxxxxxx writes:
> The Nasdaq is going to increase market hours because the ECN's are taking 1
> out of every 4 orders from them. My question is how does one get a
> Electronic Communication Network. This a trading system that individual use
> or market makers? If its market makers how does one become a market maker?
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