What is Difference Between Electronic Communication Network and Dealing Desk Account in Indices Trading?
ECN Indices Trading Account vs DD Indices Trading Account
ECN Indices Trading Accounts
ECN Indices Trading Account stands for Electronic Communication Net-work, these ECN Indices Trading Account brokers are connected to the interbank network directly through an electronic communication network & indices orders from the ECN Indices Account are placed straight to the electronic net-work.
The ECN Indices Trading Account will display different orders from different banks. Indices quote placed by these ECNs net-work of banks are direct from them to the inter bank network and orders are executed directly to the inter bank market once a trader trading with this ECN account places an order with their stock indices trading broker.
These ECNs account will charge commissions + spread for every indices trade. For these ECN Indices Account execution method every trade is matched to another in realtime over the interbank network - ECN Network.
DD Indices Trading Accounts
DD stands for dealing-desk, these DD account indices brokers have a dealing desk execution model where they can match orders & execute indices order in the online stock indices market.
The indices trader trading with a DD account will get a lot of re-quotes.
Dealing Desks will issue indices traders with a lot of order re quotes, meaning indices prices of orders are not real-time and stock indices trading broker can requote a indices trader's order if the stock indices price of the stock indices trading market changes quick enough before the broker's dealing desk places the trading order online or before they match the order in the online stock indices market.
Dealing Desk accounts therefore means that order execution of stock indices orders isn't instant & therefore this execution model might mean that orders executed using a DD Indices Trading Account are not executed as quickly as when compared to an ECN trading account or an STP trading account.
