EDGX

AAA

DEFINITION of 'EDGX'

A high-volume trading platform owned by Direct Edge ECN LLC, the third largest market center worldwide. EDGX is a type of electronic communication network (ECN) that allows traders to trade with one another directly on an exchange instead of having to go through a middleman. NYSE Arca, Nasdaq, and BATS are examples of other high-volume ECNs. In 2009, EDGX traded more than 2 billion shares of U.S. cash equity per day.

INVESTOPEDIA EXPLAINS 'EDGX'

EDGX charges liquidity takers and rebates liquidity providers. As of 2009, EDGX provides a 0.0025 credit for adding liquidity. The charge for removing liquidity is 0.0028. This structure is appealing to limit traders. Direct Edge also has another ECN platform, EDGA, which does not charge to provide or take liquidity. These costs are important to the bottom line for active traders.

In mid-2009, Direct Edge applied to the SEC to convert the EDGX and EDGA platforms into stock exchanges.

RELATED TERMS
  1. Electronic Communication Network ...

    An electronic system that attempts to eliminate the role of a ...
  2. Nasdaq

    A global electronic marketplace for buying and selling securities, ...
  3. NYSE Arca

    A securities exchange in the U.S. on which stocks and options ...
  4. Exchange

    A marketplace in which securities, commodities, derivatives and ...
  5. Liquidity

    1. The degree to which an asset or security can be bought or ...
  6. Trading Account

    1. An account similar to a traditional bank account, holding ...
RELATED FAQS
  1. What happens if a software glitch fails to execute the strike price I set?

    If you've ever suffered the frustrating experience of having an order not filled or had a strike price fail to execute because ... Read Full Answer >>
  2. Is it better practice to use a stop order or a limit order?

    Both stop orders and limit orders have their advantages and disadvantages; traders need to decide between the two based on ... Read Full Answer >>
  3. How do day traders capture profits from the difference between bid and ask prices?

    Day traders capture profits from the difference between bid and ask prices by scalping stock. Sensing that a stock is going ... Read Full Answer >>
  4. How is buying on margin regulated by the Securities and Exchange Commission (SEC)?

    The Federal Reserve Board and the Financial Industry Regulatory Authority (FINRA) regulate buying on margin to a greater ... Read Full Answer >>
  5. Why is the Vortex Indicator (VI) important for traders and analysts?

    Doug Siepman and Etienne Botes developed the vortex indicator to anticipate reversals in price trends. They believed that ... Read Full Answer >>
  6. What is the difference between business intelligence and competitive intelligence?

    Competitive intelligence is the act of understanding a company's industry and industry rivals so the company can make better ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Getting To Know The Stock Exchanges

    Here are the answers to all the questions you have about stock exchanges but are too afraid to ask!
  2. Investing Basics

    Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  3. Forex Education

    Market Makers Vs. Electronic Communications Networks

    Learn the pros and cons of trading forex through these two types of brokers.
  4. Options & Futures

    Direct Access Trading Systems

    DATs can dramatically speed up order execution - find out how this system gives novice traders an edge.
  5. Brokers

    ECN Credits: Let Your Broker Pay Your Trading Fees

    Altering your entry and exit strategy could save you a lot of money in fees. Find out how to pad your bottom line.
  6. Trading Systems & Software

    The Global Electronic Stock Market

    The way trading is conducted is changing rapidly as exchanges turn toward automation.
  7. Trading Strategies

    Knowing When To Hold And When To Sell

    When deciding whether to sell or hold on to a stock, use the "partial sell" strategy as a way to minimize risks and ensure that you make some profits.
  8. Forex Strategies

    Strategies For Forex Algorithmic Trading

    Algorithmic trading strategies, such as auto hedging, statistical analysis, algorithmic execution, direct market access and high frequency trading, can expose price inconsistencies, which pose ...
  9. Trading Systems & Software

    How New Traders Can Downplay Costs

    Concentrate on learning to play the game well in your first year as a trader, avoiding high information costs.
  10. Trading Strategies

    Why There's No Such Thing As A Stock 'Free Ride'

    If you're not familiar with freeriding and you're trading stocks, you should be. Although it sometimes happens unintentionally, it's illegal nonetheless.

You May Also Like

Hot Definitions
  1. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  2. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  3. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  4. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  5. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  6. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!