ECNs, the Next Wave

But that is no longer a threat.

"In an electronic world, everyone can see what is available on all platforms," says Angel, "With National Market System regulation, the exchanges are expected to offer the best quote. It doesn't matter what trading platform you stick your order on."

As a result, traders are preemptively seeking other options.

"A lot of people are hedging the risk of the duopoly. They want to have alternatives," says Rich Repetto, equity analyst at Sandler O'Neill.

One forum meeting with early success is Better Alternative Trading System, an ECN started in January. The company charges 15 cents per 100 shares traded, roughly half the amount charged by the Nasdaq and Archipelago, which was recently acquired by the NYSE.

Although Better Alternative, or BATS, rebates less for limit orders -- about 14 cents per 100 shares vs. Archipelago's 20 cents and Nasdaq's 25 cents -- it still is gaining momentum. Early this month, on an active trading day, volume hit almost 30 million shares and it has averaged almost 19 million shares since the beginning of the month. In only its third month in business, the network claims to have captured almost 1% of Nasdaq's trading share.

BATS trading isn't the only successful ECN. DirectEdge, a subsidiary of one of the largest Nasdaq trading execution firms, Knight Capital(NITE Quote), is another up-and-comer. Knight Capital acquired the ECN last October. Since then, the average daily volume executed has more than doubled, going from 38 million shares in November to over 91 million on average in March.

"We expect that the fight for liquidity will be intense and that BATS has a reasonable chance of gaining market share from the incumbents," Repetto said in a note Thursday. "However, the amount of share won't come easy as Nasdaq has shown with its recent pricing change."