Electronic Communications Networks VS. Market Makers Brokers

MoneyTec Forums Beginners Forum Electronic Communications Networks VS. Market Makers Brokers

This topic contains 1 reply, has 2 voices, and was last updated by  chalithuo 1 year, 5 months ago.

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  • #1021

    zee
    Participant
    • 30

    ECN brokers use electronic networks of communications to provide direct access to counter-parties. A fixed commission is charged for each transaction you make. ECN brokers quote prices from various sources and are usually considered to provide best ask and bid prices. However, before you use these systems, it must be noted that these systems are often less user-friendly and you must pay a fix commission on each transaction.
    On the other hand, market maker brokers determine their own ask and bid prices and make them available to public. Basically, these brokers are always the counter-party to your transaction and they earn their revenue by the spread between prices. These MARKET MAKER brokers also help traders by providing them with better liquidity solutions.

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    #1023

    chalithuo
    Member
    • 19

    Other than the fixed commission and at times a need for a higher initial deposit by the ECN brokers, I think they are normally better compared to the Market makers in terms of spreads and even the rate of execution of orders.

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