Saturday, June 28, 2008
Online Offerings to Cure the Summertime Blues
TO KEEP YOUR ONLINE TRADING INTERESTING THROUGH the summer doldrums, several brokers have added new wrinkles to their offerings.
In early June, Scottrade (http://www.scottrade.com) made a couple of intriguing Nasdaq-developed data tools available to users of its Elite platform. These real-time tools—Nasdaq Market Velocity and Nasdaq Market Forces—are available at no charge to customers who use Scottrade’s active-trading platform.
To qualify for Elite, you must keep at least $25,000 at the online discount broker. You download and install the software onto your PC. (Mac users running Boot Camp or Parallels can install the Elite platform as well.) Commissions for stock trades are $7 for Scottrade clients, regardless of the hardware they use.
Nasdaq Market Velocity provides a real-time picture of activity in individual stocks and ETFs by showing how current pricing and trading interest compare to historical averages. (The data presented includes all orders—even those that are cancelled or revised, whether they reach an exchange or not.) Intended to measure the intensity of trading interest in a particular security, Market Velocity can help traders detect shifts in momentum that they can play. The data display looks like a speedometer, which allows for quick visual comparisons.
The same window displays Nasdaq Market Forces, which shows order frequency by the ratio of buys to sells. A trader can use this information to see if there’s more buying or selling interest in the shares. For instance, if the ratio is weighted 7:3 buy versus sell, you’d expect the price to rise near-term.
Combined, the two tools alert traders to unusual activity in a given stock, as well as its possible direction. (They cover Nasdaq, NYSE and American Stock Exchange issues.) “What was once an indicator only available to those physically present on a floor-based market or to professionals at large brokerage firms, is now available to Scottrade Elite customers,” says Kevin Dodson, director of the firm’s online financial services. (A video overview is available at Scottrade’s “On-The-Go Training” page at http://www.scottrade.com/MediaContent/WebCast.asp.)
INTERACTIVE BROKERS (http://www.interactivebrokers.com) is offering information of a different sort. It reports that its U.S. stock executions were 0.35 of a cent per share better than the overall industry’s during the second half of 2007. The results were part of a study performed for IB by research outfit Transaction Auditing Group (TAG). TAG also found that the online broker executed orders in an average of 0.9 seconds, more than six times faster than the industry’s 5.6 seconds. The analysis included all market orders totaling less than 10,000 shares.
According to Steve Sanders, vice president, the SEC allows firms to count any price improvement—even a hundredth of a penny—as an improved trade. “We try to measure how much better or worse you do than the NBBO,” he says. (NBBO refers to an SEC rule stating that a broker must guarantee the national best bid and offer prices available to customers buying or selling shares). The industry price generally “disimproves” on the NBBO price, says Sanders, adding, “So the 35 cents per hundred shares we’re improving changes the average. The rest of the industry disimproves 25 cents per hundred shares.”
Sanders says that most brokers internalize orders, then improve them a tiny amount so they can report that a high percentage of their trades receive price improvement. “What we’re doing is publishing the net price improvement and net price disimprovement,” he explains. The formula IB uses is posted on its Website at http://individuals.interactivebrokers.com/en/p.php?f=smartRouting&ib_entity=llc.
BLACKBERRY ADDICTS, rejoice. There are two new items for you to fiddle with. E*Trade (http://www.etrade.com) has announced E*Trade Mobile Pro, which enables secure transactions, free real-time streaming stock and options quotes and the ability to place some conditional as well as standard market and limit orders. BlackBerry aficionados also will be able to view live watchlists and portfolios, and transfer between bank and brokerage accounts.
The new platform, which should run on most BlackBerry models sold in the past 18 months (including Curve, Pearl, 8800 and others running BlackBerry Device Software 4.1 or higher) will be made available to all E*Trade Securities customers for free by July 1. Mobile Pro currently is being beta-tested by select customers.
Forex traders with BlackBerries can use broker FX Solutions’ (http://www.fxsolutions.com) mobile platform, GTS Mobile, to securely log in to their accounts, place trades and monitor positions around the clock. GTS Mobile is available free to FX Solutions customers and works with a wide variety of Internet-enabled mobile devices. The firm recommends that you contact your mobile provider for information on data fees and roaming charges.
Are you trading on-the-go? It looks as if the new 3G iPhone will unleash another round of mobile-trading possibilities. We’d love to know about your experience—or concerns if you’re holding back—at firstname.lastname@example.org
Published in Barron’s, June 23, 2008.
Wednesday, June 18, 2008
Recovering from Shoulder Surgery
Last Wednesday, June 11, Dr. Michael Wall stuck a camera and a variety of instruments into my left shoulder, cleaning out several years’ worth of debris. I’m now in a sling, and start physical therapy tomorrow (HOORAY!).
Overall, I have to say that my shoulder is feeling pretty damn good. My surgeon was kind enough (or twisted enough) to give me a CD with videos of what he did arthroscopically, which I watched yesterday like it was some kind of train wreck. Fixing my shoulder looked like repairing a wall in an ancient house—had to scrape out all the garbage, coffee grounds, dirt and leftover wool from weaving in order to clean it out. Serious ugly in there, but getting better now.
I was actually in less pain 2 days post-surgery than I’d been pre-op. So it was the right thing to do, in spite of the fact that I have to lay off volleyball and softball for the summer. The sling isn’t getting in the way of my keyboarding, so there won’t be any health-related hiccups in the Electronic Investor publishing schedule.
Posted by twcarey
on 06/18 at 12:41 PM