Buying and Selling Stock
When you call your broker to buy or sell a stock or hit "enter" when placing an order through your online brokerage account that's only the beginning of the transaction. Your broker's firm must then send your order to a market center to be executed. This process of filling your order is known as "trade execution."
Your broker generally has a choice of market centers to execute your trade:
An exchange is a marketplace where traders can buy or sell stocks and bonds. For a stock that's listed on an exchange, such as the New York Stock Exchange (NYSE), your broker may direct the order to that exchange, to another exchange (such as a regional exchange), or to a firm called a "third market maker."
A "market maker" is a firm that stands ready to buy or sell a stock at publicly quoted prices. Market makers in exchange-listed stocks are known as "third market makers." Market makers in stocks that trade in over-the-counter (OTC) markets, such as the Nasdaq, are known as "Nasdaq market makers" or simply "market makers."
Electronic Communications Network (ECN)
An electronic communications network (ECN) is an electronic trading system that automatically matches buy and sell orders at specified prices.
To learn more about the basics of trade execution including order routing, payment-for-order-flow, and internalization you should read Trade Execution: What Every Investor Should Know.