Saturday, November 22, 2008

Siebert Upgrades, and Social Media Expands

SIEBERTNET, AN ONLINE BROKERAGE THAT typically finishes near the top of Barron’s annual review, rolled out updates on Nov. 7 that lend more functionality to its trading game.

"We think clients will find the new features useful,” says the firm’s CEO, long-time Wall Streeter Muriel Siebert. “We have some more in the planning stage. Customer acceptance is growing, and we’re very pleased.”

The new order tickets, which are accessed from the “Trading” tab on the site’s main screen (http://www.siebertnet.com), offer more flexibility and trading data as you create an order. While viewing your position list, you can click on a particular symbol to automatically create a closing trade. For multi-lot positions, the order ticket is populated with all the lots you own, giving you the ability to quickly choose particular tax lot for the sale.

When a ticker symbol is entered, you’ll see a real-time quote plus an intra-day and yearly chart, as well as news. The order tickets are segregated by type of trade—stocks/ETFs, options, mutual funds, and fixed income—and the screen displays your current positions with real-time quotes.

You can stage up to 10 orders to be sent at a later time, and can also generate contingent orders, including trailing stops that help you capture possible gains while limiting losses. The Options Wizard, which helps you fashion complex options strategies, a smoother application than its predecessor. The Wizard provides a table of possible options orders, and as you glide your mouse over it, the details behind each strategy are displayed.

Once you choose an underlying symbol and the strategy you want to employ, a real-time options chain display appears. When you click on the options you want to trade, the ticket is automatically filled in. The Strategy Builder, another options tool, displays real-time debit/credit amounts, maximum gain, maximum loss and break-even points by strike price. Our only quibble with this site for options traders is that the commission structure is still arcane and expensive compared to other online brokers’.

Clients can customize their own “My SiebertNet” page with up to eight mini-applications, including positions, news headlines, the Options Wizard, charting and watchlists. The site’s research offerings, all free to customers, include Validea, VectorVest, MarketEdge weekly reports, Growth Stock Analytics and RTT Streaming Real-time News. There are screeners for fixed-income offerings as well as stock, mutual funds and options. All research has been grouped by type and is easier to find than before.

For clients who are uncomfortable switching to a new trading platform right away, the old site is still there. Siebert explains, “We’ve kept the original trading site up because, in this volatile market, if folks want make a trade right away, they should be able to do so and then switch to the new site at their own pace.” You can take a look at what’s new by clicking on the “Presentation Center” tab on the main Siebert page.

Social Media and Investing: Corporate Insight, market-research and consulting firm focused on financial services, released a report in late October that details the evolution of social media, such as blogs, forums and online communities, that have been created by major financial-services companies.

SOCIAL MEDIA, THE GROUP SAYS, are beginning to reshape the way financial-services firms communicate with their customers, as well as how investors interact with each other.

The Electronic Investor has covered many of the sites intended to appeal to investors who like to share ideas and insights with one another, so we were intrigued. Corporate Insight examined features used by nearly 70 financial institutions, including brokerages, banks and credit-card issuers, annuity providers and mutual-fund companies. Fifteen percent of these outfits added significant social-media features to their online platforms in 2008, and 70% have developed full-fledged online communities.

TradeKing (10,700-plus participants) and Zecco (38,000-plus) allow full participation regardless of whether you have an account. Schwab and Scottrade’s online communities are for customers only. Schwab’s (approximately 4,200 members) is restricted to active traders who make more than 36 trades per year, while Scottrade’s community (approximately 8,000 members) is open to all clients.

TD Ameritrade offers a sentiment-tracking tool on its Website that allows clients to vote on the daily performance of a stock and to assess other traders’ views. Fidelity hosts a community for its WealthLab Pro users but not its broader client base.

Corporate Insight uncovered six brokers with YouTube channels. And OptionsXpress, Scottrade, Vanguard, Wells Fargo and Zecco all feature ideas and tools on their Websites, while E*Trade’s channel is a repository for its TV commercials.

The study didn’t include sites like Covestor and Cake Financial that we’ve reviewed. But it’s interesting to see financial-services firms trying community features to keep their customers coming back.

Published in Barron’s, November 17, 2008. 

Posted by twcarey on 11/22 at 10:23 AM
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Saturday, November 08, 2008

New Broker Dives Into Rough Waters

IT MAY SEEM LIKE A STRANGE TIME TO OPEN an online brokerage, but record volatility also offers trading opportunities. So maybe it’s not so crazy after all.

TradeMonster (http://www.trademonster.com), like several other new brokerages, is a subsidiary of an options-oriented trading firm, OptionMonster. Co-founders (and brothers) Jon and Pete Najarian, the latter a frequent contributor to CNBC’s “Fast Money,” had their own idea of what an online brokerage should look like, and in 2007 put together a team to build a platform that they believe is simple, intuitive and fun.

For the most part it is flexible and easy to use and customize. Because it’s a baby brokerage, there are a couple of holes—there is no easy way to trade mutual funds and bonds online—but for those interested in trading mostly equities and options, it’s a good choice.

“THE TYPICAL INVESTOR DOESN’T
want to be tied to a single computer but wants ...the power of a downloadable application, with the ease of a browser,” says TradeMonster CEO Wade Cooperman.

The platform follows a cockpit model. There’s real-time streaming data everywhere you look, and the set-up allows you to create an order from every view. One especially nice touch is that education is thoroughly integrated: You don’t have to exit the screen you’re looking at—say, an options-order entry—to learn more about the order you’re about to place.

“We put all the education one click away,” says Cooperman. “Most brokers’ education takes you far away from the trading and data. That’s not the way it works in our platform; it’s all part of that cockpit.”

The layout is easily customized. The basic cockpit setup is divided into thirds, with two narrow columns on either side of the bigger center section, which is where you’ll find order entry, charting, and account information.

The two narrower columns allow you to display “mini-apps,” such as live data about your account, open orders, trading messages (like when a trade has executed or an alert has been triggered), a watch list, financial news, and an overview of the market. You can drag and drop these mini-apps from one side to the other; the mini-app remembers where you put it and will stay there.

News feeds come from Yahoo! Finance in a separate browser window, which brings you stories from AP, Thomson Reuters, Business Wire and PR Newswire. Currently there are no premium newsfeeds.

TradeMonster’s developers have strived to make the application conducive to trading. It allows you to multi-task, using the mini-apps and tabs on the main trading screen, so you’re not locked into the one-page-at-a-time setup of most browser-based applications.

A lot of thought went into helping customers develop good trading habits. You’ll find answers to many fundamental questions about a stock before buying it, and will be reminded to have an exit plan, either a target gain or stop loss, at the time you place an order.

As you might imagine in a platform created by options traders, there’s a lot of options data, mostly about volatility. You can specify the number of strikes to view, as well as expiration dates, and type of spread. When you click on a plus sign next to a quote, you’ll get more details, including risk metrics. There are 15 spread types to view, from simple calls and puts to multi-leg spreads like collars and butterflies.

THE CHARTING PORTION
of TradeMonster lets you view four different styles: line, candlestick, area and bar. The account-management screen lets you view your positions, and aggregates performance metrics and risk metrics by strategy.

Mutual-fund traders can find Lipper data to help make trading decisions, while bond traders will have to call customer service to get quotes and place trades. Trading mutual funds is a little clumsy; you have to type the five-letter ticker into a trade ticket yourself.

All stock and ETF trades are $7.50 for up to 5,000 shares (add 1 cent per share for larger transactions), while options trades are 50 cents per contract with a $12.50 minimum. Mutual-fund and bond transactions are $15 per trade. Trades are cleared through Penson.

All the tools on the platform are available to every account holder, and the pricing is the same no matter how many trades you place.

So if you’re frustrated with your browser-based broker, take a look at TradeMonster. Its features have some similarity with those you’ll find in thinkorswim or OptionsHouse, but they have their own flair, and I believe they’ll be a force to contend with in the not-too-distant future.

Published in Barron’s, November 3, 2008.

Posted by twcarey on 11/08 at 10:08 AM
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