ECN vs Market Maker
Two broker models: an ECN routes your order to outside liquidity, a market maker takes the other side itself.
An ECN (Electronic Communication Network) broker passes your order into a pool of prices from banks and other liquidity providers. It earns a fixed commission per lot and is indifferent to whether you win or lose. Spreads are raw and variable - sometimes 0.0, sometimes wide.
A market maker quotes its own prices and often takes the opposite side of your trade internally. That is not automatically sinister: internalising flow lets a broker offer fixed spreads, smaller trade sizes and instant fills. But it does create a structural conflict of interest that regulation, not goodwill, is what keeps in check.
Neither model is universally better. Scalpers and algorithmic traders usually prefer ECN pricing for its tight raw spreads. Beginners trading small size often prefer a market maker's predictable fixed spreads and lack of per-trade commission. What matters more than the label is the broker's regulator and its published execution statistics.
Related terms
The gap between the buy and sell price of an instrument - the broker's built-in cost of trading.
The difference between the price you expected on an order and the price you actually got.
A bank or institution that continuously quotes buy and sell prices your broker can route orders to.