Electronic Communication Network (ECN) is a technology-driven system used in financial markets to facilitate direct electronic trading between buyers and sellers. It serves as a decentralized marketplace, connecting traders, institutions, and liquidity providers.

ECNs eliminate the need for intermediaries such as brokers or market makers, allowing participants to trade directly with each other. This results in several advantages, including increased transparency, faster execution, and potentially lower transaction costs.

In an ECN, participants can view real-time bid and ask prices from multiple market participants, enabling them to make informed trading decisions. The system matches buy and sell orders automatically, ensuring fair and efficient order execution.

ECNs are particularly popular in the foreign exchange (forex) and stock markets. They provide access to a deep pool of liquidity, allowing traders to execute large orders without significantly impacting prices. Additionally, ECNs offer the opportunity for traders to participate in after-hours trading, extending the trading day beyond regular market hours.

Overall, ECNs have revolutionized the way financial markets operate, providing traders with a more direct, efficient, and transparent trading environment.