Saturday, March 01, 2008
Online Brokers Prep for Big Game
SPRING TRAINING IS UNDERWAY FOR ONLINE BROKERS—and every firm can still dream about victory as Barron’s annual review approaches in a few weeks. Here are some of the most intriguing lineup changes.
AT THINKORSWIM (http://www.thinkorswim.com), the focus is on enhancing customer experience, according to president Tom Sosnoff. The firm added CNBC Plus live, an online version of the TV broadcast—streaming and commercial-free—delivered to its software trading platform with market news and analysis at no additional charge. ThinkScript, a language customers can use to code and back-test their own proprietary indicators, was also added to the platform, along with forex trading in 123 currency pairs.
For investors on the go, thinkorswim has a new wireless trading platform for BlackBerrys and other mobile devices called thinkMicro. (Do you detect a pattern in the firm’s product names?) A set of trading gadgets called thinkPod can be linked to Websites such as those for news, and allows you to place trades without having to be logged into the thinkorswim software or Web application. Sosnoff and his firm have launched a quarterly magazine, thinkMoney, “which mixes advanced trading articles with our feeble attempts at satire.”
OPTIONSXPRESS (http://www.optionsxpress.com) is coming off an important year in which its founder, David Kalt, moved on. CEO David Fisher, who took the reins last October, says the firm’s “culture of persistent innovation” continues. OptionsXpress was among the first retail brokerages and the only Web-based online broker to offer portfolio margining, which bases margin requirements on the sum of an investor’s positions, including options, rather than individual holdings. Other firms offering portfolio margining ("New Options for Traders,” Oct. 30, 2006) are software-based and focus on very frequent traders.
“To ensure that we would be first to market with portfolio margin and that the integration would be seamless, we built all of the functionality in-house,” says Fisher.
Another goal achieved: integration of XpressTrade’s futures platform. ("Out of the Pit: Futures Go Online”, Jan. 14) “Our customers can now trade futures side-by-side with securities on a state-of-the-art platform,” Fisher says.
E*TRADE (http://www.etrade.com) added some muscle to its Web-based trading platform as well as to E*Trade Pro, its software-based platform for frequent traders. A big change was the addition of E*Trade’s Global Trading Platform, which provides U.S.-based retail investors the ability to trade stocks online in six foreign markets in local currencies. The new Global Trading Platform also features free real-time international quotes for the six markets (Canada, France, Germany, Hong Kong, Japan and the U.K.), and a redesigned customizable “Global Markets” page with free company-specific research from Reuters for the relevant markets.
E*Trade also expanded its roster of research tools, such as a redesigned online research center, with new features and links including intraday commentary and blogs from Seeking Alpha; enhanced market and news pages; daily trading ideas from MarketHistory.com and E*Trade’s “Most Popular” (a daily list of the 10 most frequently viewed symbols by E*Trade customers); and other news. Still more new goodies include MarketEdge, Second Opinion reports, an integrated and extremely spiffy stock screener, and a redesigned mutual-fund and ETF research center.
Customers of E*Trade Pro can now see every market maker involved in a given stock with free access to TotalView and OpenView data through the Market Depth window. A graph and a momentum bar provide traders with visuals of what they used to have to conceptualize themselves with Level 2 data. Also included: a suite of powerful new tools for options re- search—streaming Greek options chains, expanded market data and customizable inputs for calculations. For the last of these, a user can access the new Options Model Setup window to customize how analytics are calculated by choosing a pricing model (Black-Scholes or Binomial), statistical volatility, interest rate and more.
ROOKIE OPTIONSHOUSE (http://www.options-house.com), which launched in January 2007, introduced Virtual Trading, giving customers the opportunity to practice trading with all the site’s tools and capabilities—without risking their own money. On deck for this year are advanced order types, tax optimization and reporting tools from Maxit, and a new stock-screening tool.
We’ll just have to wait and see who the winners are.
Published in Barron’s, March 3, 2007.