Saturday, September 02, 2006
Refreshing the Screen
BETTER. FASTER. NEW AND IMPROVED. MORE POWERFUL. Software publishers survive by adding features and products to entice you to join their team, maintain your loyalty (if you’re already onboard) or come back (if you’ve signed on with a rival). Here are a variety of software publishers and online brokers striving for your attention—and your business.
INTERACTIVE BROKERS (http://www.interactivebrokers.com) has spruced up its tools for options traders by providing a new service, Options Intelligence Report, as well as volatility trading functionality.
Updated hourly, the Options Intelligence Report includes tables that highlight companies expected to have the greatest price movement. Examples include one table that ranks the top 20 gainers in implied volatility, another that shows the top 20 put/call ratios (suggesting negative sentiment) and yet another that lists the top 20 call/put ratios (suggesting positive sentiment).
IB has also given options traders the ability to enter options limit prices in volatility terms as well as price using its VolTrader, which is a new function in its software application, Traders WorkStation (TWS). You specify the option volatility and TWS calculates the limit price. When you enable volatility trading, the bid and ask values are displayed as volatility instead of price. You can also set up dynamic management of these volatility orders, under which TWS updates the limit price based on movements in the underlying price, canceling an order if the underlying price breaks through a high or low price range the user has specified.
Another interesting—albeit complicated—trading strategy automated in a recent update of TWS is called Exchange of Futures for Physical, which allows the swap of a long or short stock position for a corresponding one using single stock futures (futures contracts on individual stocks). In effect, the EFP strategy allows the user to reduce his margin costs, which have been rising of late along with other borrowing rates. Investors buying stocks on margin usually pay rates set by one broker. But the rate built into a single-stock future is often lower because it’s competitively quoted by various firms. IB is the only brokerage that allows trading of EFPs online, says Executive Vice President Steve Sanders.
FIDELITY INVESTMENTS (http://www.fidelity.com) has rolled out an update to its strategic trading application, Wealth-Lab Pro, which includes the integration of 10 years of historical macroeconomic data, such as gross domestic product and the consumer-price index, into the program’s modeling capabilities. Wealth-Lab Pro, introduced last year to Fidelity customers, allows active traders to create, back test and execute customized trading strategies. This new functionality is intended to enable traders to create their own trading systems keyed to the government’s release of 20 different economic figures.
Wealth-Lab Pro has also added Trend-line trading, which, among other things, lets the user set trade alerts that can be triggered when prices cross above or below a drawn trend line.
Wealth-Lab Pro is free to Fidelity customers who make 120 or more trades per year and have $25,000 or more in assets. Those with over $1 million in household accounts at Fidelity also qualify for the active trading tools and commissions of $8 per transaction for stocks.
AS THE FIRST ANNIVERSARY of Hurricane Katrina looms, Intuit has released its Quicken Home Inventory Manager (http://www.intuit.com), which offers a way for homeowners to document their possessions. Intuit’s personal finance program, Quicken, includes a text-based home inventory module, but that allows the user only to type in descriptions and values.
The new Home Inventory Manager, however, lets you attach detailed documentation—sales receipts, warranty records and photographs—to your records. If you purchased an item online, the electronic receipt from the vendor can be included, among other new capabilities.
Retailing for $29.99, the system integrates with Quicken to calculate your net worth. You can also subscribe to Quicken’s online backup service, which starts at $9.99 per year, so that you have a reliable copy of the file in case the computer you used to create it is destroyed.
FOLIOFN (http://www.FOLIOfn.com), which allows customers to trade baskets of stocks on a dollar basis, rather than a share basis, is adding 2,000 mid- and low-cap stocks to those that can be traded during two daily “windows” at relatively low cost. These stocks can be found under the “Tier 2” designation, which also includes many exchange-traded funds. Once it’s fully implemented, Tier 2 will increase the universe of securities that you can window- trade to more than 5,500.
Users, who pay a monthly fee ranging from $19.95 to $39.95, can customize any folio to meet preferences. Trading Tier 2 stocks will incur added fees of up to $2.95-$5.95 per transaction for most of FOLIOfn’s various membership plans.
Published in Barrons, August 28, 2006
Saturday, August 19, 2006
Latest Road Rage: Trading
HOW CAN YOU ROAD WARRIORS OUT THERE maintain control of your portfolio? One obvious way is to keep the bulk of frequently traded holdings with an online broker that offers wireless access to your account. Brokers have made real strides in the past couple of years, helping peripatetic customers stay in touch with their money.
Even if you don’t have a Fidelity (http://www.fidelity.com) account, you can log into Fidelity Anywhere from your Internet-enabled cellphone or wireless PDA and get delayed quotes, charts, watch lists, market news and leading market movers. Fidelity customers have it even better: They can log into their accounts and view real-time quotes, charts and news, and trade stocks, options and mutual funds. Customers with Java-enabled phones can use Fidelity’s Java application, which shows icons rather than text for the fund giant’s menu. Fidelity has put lots of effort into its wireless offerings, and it shows.
Thinkorswim (http://www.thinkorswim.com) also has two programs that allow you to access your account wirelessly while traveling. For instance, thinkAnywhere, which runs on Pocket PC and Pocket PC phones, lets you trade from multiple accounts. The options-trading screen displays multiple strike prices, and the order book shows all your open orders, as well as other order-related events. A position monitor even tracks the Greeks for your options holdings. If you don’t have a Pocket PC, you can use thinkMobile, which isn’t as versatile as thinkAnywhere but does allow you to place stock and single-options trades, cancel working orders and close current positions. Point your phone’s browser to http://www.tosmobile.com to get started.
SiebertNet (http://www.siebertnet.com) includes MobileBroker, providing wireless access to an existing Siebert account. MobileBroker lets you trade equities, mutual funds and options, as well as receive execution reports, real-time quotes and alerts, margin-call information, balances, positions, stock-specific news and account history. Siebert charges $29.95 per transaction placed via MobileBroker, unless you’re using a wireless Compaq Tablet PC, when the commission is $14.95 for up to 1,000 shares.
E*Trade is another rest stop for weary travelers in need of quotes and news. You can log on to http://www.etrade.com with your mobile device, even if you’re not a client. Account holders can trade stocks and options, view balances and check out alerts. You can even get directions to the nearest E*Trade Center if you crave some face time.
Later this year, MB Trading (http://www.mbtrading.com) will begin rolling out its new technologies, including Navigator Mobile, which will run on cellphones, Palms and other Java-enabled wireless devices. Mobile will provide real-time quotes, account management and many of the features found in MB Trading’s flagship product, the Navigator. “We have had an incredible amount of interest from our customers who travel and need market access,” says David Lipsett, MB Trading’s executive vice president.
Those who want to keep tabs on stocks and news while on the go, but don’t need to be logged in to their trading account, should check out AlphaTrade’s Jupiter. AlphaTrade (http://www.alphatrade.com) also offers a non-mobile application called E-Gate, which gives you quotes and charting for stocks traded on U.S. exchanges, in Canada and on the London Stock Exchange. You can sign up for both services, or get the wireless application independently.
Pricing starts at $17 a month if you sign up for either E-Gate or Jupiter; there’s also a $10 data-access fee. If you subscribe to E-Gate, you can add the Jupiter wireless program for another 10 bucks a month. Nasdaq TotalView is available for an additional $20 per month. You will also have to pay for quotes from the various exchanges, which will add at least $3 to your monthly bill. There’s a 14-day free trial.
INVESTOR ED: Have you ever wanted to know exactly what a clearing firm does? Or what happens to an order after you’ve entered it? A well-designed site, Path to Investing http://www.pathtoinvesting.org), was recently introduced by Lightbulb Press for the Foundation for Investor Education. It answers some of these fundamental, but often overlooked, questions.
The site offers advice about choosing a broker, including ways to verify that your broker is licensed and registered with the Securities Investor Protection Corp. Another suggestion: Check with the NASD to see if it has any complaints against the broker on file. The tab entitled “How Markets Work” is full of information that every online investor should know. It’s definitely worth a look.
MOVING TO A MAC? Several readers have asked about analysis and trading programs that run on Apple’s Macintosh system. The truth is, most online brokers offering software-based trading applications that an investor downloads and installs have packages that run only on a Windows-based machine. Thinkorswim’s (http://www.thinkorswim.com) Java-based trading application, however, runs as-is on a Macintosh. So, to use it, you won’t have to turn your old Mac into a virtual PC. (New Macs, which use Intel chips, greatly ease the use of Windows-based applications and can run them directly.)
We’d be very interested to know of any difficulties readers face when they’re making the PC-to-Mac transition. We’ll try to answer your questions in a coming column. Drop us a line at electronicinvestor@yahoo.com .
Published in Barron’s, August 14, 2006.
Saturday, August 05, 2006
Unhappy Honeymoons
EARLIER THIS MONTH, WE REPORTED on technical glitches that had prevented some of the 2.1 million legacy TD Waterhouse customers from accessing their accounts at the revamped TD Ameritrade site following their broker’s merger with Ameritrade ("Tears at Waterhouse,” July 3). What wasn’t clear then was how extensive the outage was or how effective the fixes would be. TD Ameritrade has now shed some light on this.
Spokeswoman Kim Hillyer says that as many as 82,000 customers, or about 4% of the total, were blocked from their accounts for one to four days in mid-to-late June. As reported, a beefed-up security system that doesn’t store account numbers, among other items, prevented some clients from logging on.
Hillyer says that software implemented on June 21 has, by all accounts, been successful in alleviating the problem. “If clients are still having difficulties, they shouldn’t be related to the issue we encountered in June,” she says, adding, “We’re happy to help those clients in any way we can.”
Meanwhile, at E*Trade, which has purchased former online rivals Harrisdirect and BrownCo, some client dissatisfaction continues.
A number of one-time BrownCo clients recently complained to us about the cost-basis reporting on the positions they entered prior to the takeover. One reader said the total gain in his account was incorrect because the history of corporate actions wasn’t transferred from BrownCo. “No splits or other actions that might affect the original share cost are noted, and the result for many stocks is wildly incorrect gains or losses,” he stated in an e-mail. Moreover, a legacy Harrisdirect customer reported that the cost basis of one of his positions was changed to zero after the company was de-listed in the U.S., even though it was still trading in Canada.
E*Trade spokesperson Cora Lee says that the firm is working to improve its cost-basis system, including its ability to incorporate updates for mergers or other corporate reorganizations. “This enhancement is involved, given the complex nature of corporate reorganizations, but it is something E*Trade aims to roll out soon,” she says. “It’s a priority for us.”
E*Trade’s recent focus has been on incorporating conditional orders into its order-entry system. We’ll take a look at that and report back.
FOREIGN-EXCHANGE TRADING has been heating up, in part owing to the dollar’s retreat but also because it’s a volatile 24-hour-a-day-market—perfect for trading junkies. Several months ago ("Seek and It Shall Find,” Feb. 20), we looked at an intriguing forex broker named FX Solutions (http://www.fxsol.com), which had developed an automated trading system that maintains the spread between bid and ask at 3 pips (hundredths of a percentage point). We were impressed by the site, but criticized its anemic charting capabilities. They’ve filled out substantially since.
The company recently introduced FX AccuCharts, a proprietary charting application that takes advantage of a fast data feed. It’s available to customers who have funded accounts at FX Solutions—those who have signed up only for demo accounts can use GTS Charting, which doesn’t offer as many forms of technical analysis as AccuCharts.
On starting up AccuCharts, you’re presented with a column of flags on the left-side of the screen; clicking on one opens up a pricing page that shows the currencies you can trade against the one you’ve selected. For example, if you click on the Aussie flag, you’ll get all the pairs applicable for trading the Australian dollar. If you click on the button labeled “All,” you can see real-time pricing for all 20 currency pairs tradable via FX Solutions.
The displayed prices can be executed immediately if you’re also logged into the trading area of FX Solutions. You can’t trade directly from the charts section at present, but manager of foreign-exchange sales Bill Lawless says the firm will soon provide that option. Currently, you can “float” a trade ticket from the trading application over your charts so you can enter a market order. “We’re working on putting limits and stops into our floating trade tickets,” says Lawless.
The charting package lets you combine two currency pairs on a single chart by clicking on a price display, then dragging and dropping it onto another chart already displaying another pair. For instance, while viewing a dollar/euro chart, you can combine it with a chart showing Swiss franc/yen so you can monitor price changes simultaneously. You can also can keep up to 20 virtual pages, customized with charts and data.
Changing the time horizon of a chart is easy. Switching from a five-minute time frame to a monthly chart takes a single click. You can also set up various alerts when key changes occur, such as a break in a trend line.
Since most retail forex traders crave technical analysis, FX AccuCharts is packed with more than 150 indicators—it also lets you create your own—and studies. These tools give FX AccuCharts the technical analysis needed to complement a trading platform that already provides tight spreads and accurate pricing.
Published in Barron’s, July 31, 2006.
