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THE OPTIONS COURSE- ELECTRONIC ORDER ROUTING SYSTEMS

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THE OPTIONS COURSE

ELECTRONIC ORDER ROUTING SYSTEMS
In a relative sense, electronic communication networks (ECNs) are fairly new. Changes in the 1990s made it possible for the small investor to get access to Level II data and compete with market makers through the use of ECNs. Level II quotes are one of three levels of the National Association of Securities Dealers Automated Quotations System (Nasdaq). Level I quotes provide basic information such as the best bids and asks for Nasdaqlisted stocks. Level II data provides investors with more detailed quotes and information, including access to current bids and offers for all market makers in a given Nasdaq-listed stock. Level III is the most advanced level and is used by market makers to enter their own quotes to the system. 

In order to utilize ECNs you need to use a broker who provides direct access to them. Most traditional online brokerages offer Level I quotes; only direct-access brokers provide Level II quotes. ECNs are little exchan…