📖 Financial Lexicon Term
What is ECN Broker?
Electronic Communication Network broker. Routes orders directly to liquidity providers, offering tighter spreads and transparent pricing in exchange for a commission per trade.
Detailed Explanation
An ECN (Electronic Communication Network) broker operates a conflict-free execution model. Instead of taking the opposite side of your trade, the ECN broker connects you directly to an open ledger of banks and liquidity providers, securing raw 0.0 pip spreads.
💡 Practical Trading Example
ECN brokers make money by charging a transparent flat commission (e.g. $7 per lot) rather than widening the bid/ask spreads.