Saturday, January 07, 2012
Lots of Goodies From Online Brokers
Schwab and TD Ameritrade and its thinkorswim unit all delivered gifts for traders in December. Including a quieter CNBC.
As 2011 turns to 2012, active traders at Schwab, TD Ameritrade and thinkorswim have been given a little added holiday cheer.
Launched last February, Charles Schwab’s (http://www.schwab.com) active-trading platform, StreetSmart Edge, was updated in mid-December. Kelli Keough, Schwab’s vice president of active trading, claims this upgrade is the most significant in satisfying client requests and enhancing workflow. New are screening tools, momentum monitors, updated charting tools and the ability to link an optionsXpress account into StreetSmart Edge. The downloadable application, featuring streaming charts, news and account data, is available to clients who trade more than 36 times in a 12-month period.
When viewing a price chart for a stock in StreetSmart Edge, you can see small tiles where you have an open position or open order. If you’ve got an open order, identified by a “B” (for Buy) or “S” (for Sell) tile, you can drag the tile to a new price to change your open order. If you’ve set a limit order price that is off the displayed price scale, the tile points in the direction of your chosen price. That gives you a quick visual cue that you’re trying to trade well away from the market.
Stock and ETF screeners have also been spruced up. Screener Plus allows you to use its built-in screens, or customize and save your own. You can combine technical indicators as well as fundamental data, selecting from over 140 variables. The ETF screener is a separate program from Screener Plus, and is based on the tool available to all Schwab customers. It’s now integrated into StreetSmart Edge in a built-in browser window; previously, you had to log into the Schwab Website to use the ETF screener.
The momentum tool offers interesting information, tracking the ratio of upticks to downticks for a stock’s quotes. If a score is calculated to be -2%, it’s saying there are 2% more downticks than upticks during the period. You can customize time periods; it defaults to one minute but you can go as high as 60 minutes. Keough advises clients to set up watchlists that separate highly volatile stocks from less volatile holdings and to monitor the momentum shifts with this tool.
Your StreetSmart Edge layouts are stored on your local computer, but you can also leave them on Schwab’s servers to make it easy to access the program from different computers. Right now it’s a Windows program that runs on Macs with the appropriate emulator, but Schwab is working on a native Macintosh application that it expects to release some time during 2012.
TD AMERITRADE (http://www.tdameritrade.com) launched a new release of its thinkorswim-developed Trade Architect platform in mid-December, as well. Trade Architect is a bridge program that helps an emerging active trader transit from the basic TD Ameritrade Website to all the bells and whistles of the thinkorswim platform.
Third-party research has been integrated into the Trade Architect platform, and the investing social network myTrade has also been folded in. MyTrade allows participants to share ideas, trades, charts and other ideas in a secure environment. Trade Architect’s profit-and-loss graphs can be quickly attached to a note, and if you see an idea that you like posted by another participant, clicking on a “copy” button pre-fills an order entry ticket with the particulars of that trade.
A stock screener was added to Trade Architect so that it now has 25 built-in factors, and the company plans to expand that to 80. The screens can’t be customized; Steve Quirk, senior vice president at TD Ameritrade’s Trader Group, says, “When clients need greater customization, they graduate to the full thinkorswim platform.”
One other change: the CNBC video feed no longer automatically starts when you launch the platform. Customers who were trying to access their account quietly didn’t want the video giving them away. So now you have to press a button to watch the feed.
THE THINKORSWIM PLATFORM IS also being transformed, starting with the home page that’s displayed upon login. It’s a much softer look than before, with two tickers that roll live news headlines and prices. You can find shortcut buttons that get you to any part of the application, such as Alerts, Charts and Trades, at the bottom of the screen.
Futures calendar spreads, a relatively rare feature, have been built into the new thinkorswim. Most futures trades take place one leg at a time, so the ability to create and trade a spread with multiple legs is of note. Pairs trading, which allows you to trade multiple futures contracts simultaneously, is also now built in. The firm has made futures transactions seamless again, following the hiccup that occurred when thinkorswim’s clearing operations were folded into TD Ameritrade’s clearing in August.
One terrific feature of the new platform is the real-time market-scanning tool, which monitors the markets for specific technical events like breakouts and moving-average crossovers on a tick-by-tick basis. The scans run very quickly, which Quirk credits to the horsepower provided by Ameritrade.
A LITTLE TOO PERSONAL CAPITAL: We heard from a reader who had started to use Personal Capital (http://www.personalcapital.com) after our story about the new service ("Intuit Chief Launches Finance Site,” Sept. 26, 2011). However, the reader had several foreign stocks that the Personal Capital identification engine couldn’t handle, so he decided to shut down the account. After some communication woes, the reader contacted The Electronic Investor over worries that his data remained on the firm’s servers.
Jay Shah, the company’s chief information officer, said the reader’s account was deleted within hours of his request, but somehow e-mails informing him got stuck in the ether. Shah explains that Personal Capital, as a registered investment advisor, must keep some data per SEC mandates, but any links to financial accounts are removed. The firm is required to maintain basic demographic information, such as a former customer’s name and address, as well as a summary of any advice they may have presented during their relationship with the client. “For account data, we apply the highest level of sensitivity and security. Nobody in the company has access to that information—it’s encrypted, locked away, and we’ve swallowed the key,” Shah says. He also assures us that Personal Capital’s improved identification engine is having fewer problems recognizing foreign stocks as well as options contracts.
IT’S THAT TIME OF YEAR AGAIN, as we gear up for our 17th annual review of online brokers. What feature or service could a brokerage offer that would entice you to sign up? What kind of research are you finding most useful in these volatile markets? Let us know at firstname.lastname@example.org .
Published in Barrons, January 2, 2012.