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Web brokerages survive raucous day with few glitches
Reuters, Monday, October 27, 1997 at 22:32
PALO ALTO, Calif., Oct 27 (Reuters) - The central computers of online stock brokerages
groaned under a crush of trades at the height of Monday's stock market plunge, but most of
them continued to operate without a hitch.
The online brokerage sites of companies like E*Trade Group Inc., Charles Schwab & Co. and
Fidelity Investments each reported slow response times because of record trading activity, but
none of them stopped a trade for customers, company representatives said.
The online stock-trading business has been doubling every six months by some estimates, yet
some investors have been leery about opening online accounts.
The emerging industry faces a perception that investors would not be able to execute trades
during a stock market crash because of heavy Internet traffic, clogged phone lines and bulky
telecommunications connections.
The steady performance of brokerage sites on a day when the Dow Jones Industrial Average
had its biggest point drop in history -- 554.26 points to close at 7,161.15 -- could boost the image
of the industry.
"Today is very much a watershed day in the confidence of the investor," said Christos
Cotsakos, chief executive of online trading pioneer E*Trade. "The speed to access content,
market information and execution was markedly faster
electronically than through a human."
Cotsakos said E*Trade's online trade execution system
performed "flawlessly," even though it faced double the normal
trading activity.
Other popular trading sites -- such as eSchwab, Fidelity
Brokerage Services and Discover Brokerage Direct -- also had
record traffic. Representatives of each site said their systems
worked without a glitch.
"We had no down time," said Blake Darcy, spokesman for
investment bank Donaldson Lufkin & Jenrette Securities Inc.,
which runs the DLJ Direct online site. "Trading volume was 40
percent above normal, even considering that (stock exchanges)
took an hour out of the trading day."
The New York Stock Exchange, Nasdaq and other exchanges
stopped the trading of almost all financial securities for
about an hour during the day. Online brokerages, like human
brokers, could not execute trades during the halt.
(-- Kourosh Karimkhany, in Palo Alto 650-846-5401)
Copyright 1997, Reuters News Service |
