If you understand ECN's you begin to understand that the NSCC has a program for entering and canceling trades. Attempts to buy a stock could create a corresponding short sale, offsetting the buy... and in some cases whacking the bid significantly. All the preceding short trades could then be canceled with no impact on the current price. The trades affect the market while being exercised, but after being canceled have zero impact on the manipulating broker and his/her margin account.
ECN
Definition
Electronic Communication Network. An electronic system that brings buyers and sellers together for the electronic execution of trades. It disseminates information to interested parties about the orders entered into the network and allows these orders to be executed. Electronic Communications Networks (ECNs) represent orders in NASDAQ stocks; they internally match buy and sell orders or represent the highest bid prices and lowest ask prices on the open market. The benefits an investor gets from trading with an ECN include after-hours trading, avoiding market makers (and their spreads), and anonymity (which is often important for large trades).
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