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Non-Tech : Datek Brokerage $9.95 a trade -- Ignore unavailable to you. Want to Upgrade?

To: nick nelson who wrote (12837)	7/24/1999 3:30:00 PM
From: Sir Francis Drake	Read Replies (2) \| Respond to of 16892

Nick, you are 100% right. There are parties which would certainly like to see Datek's growth curtailed - that goes without saying. However, Datek is its own worst enemy. One quote which caught my eye: <<Datek Online [...] has separated itself from the pack by capturing the lucrative active-investor market. >> Well, they are NOT going to keep the "active-investor" very long, if they do not improve their technical performance, which has been slipping. I couldn't agree more with you: "However, for Datek to spend $100 million dollars on advertising and NOT $50-$75 million on hardware and software infra-structure IMPROVEMENTS is unconscionable." This is an absolute scandal. A new crush of customers, which they are clearly hoping for (why otherwise spend a fortune on advertising), without improving their technical infrastructure, will only result in even worse performance going forward. As an active trader, and Datek customer of long standing, I am outraged. I am already in the process of transferring most of my funds out of Datek, and while in the past, I have often recommended Datek to other traders, I can no longer do so. It would be unethical of me to recommend a broker, who so manifestly does not care about their active traders. I do not wish anyone else to have to go through what I have experienced all too often, and for all too long: busy servers, disappearing orders, increasingly poor and suspect executions, broken promises. I am not as yet at the stage of actively discouraging those who ask me about Datek (the last time I recommeded Datek was a few weeks ago to two acquaintances who were interested in more active trading and were sick of Ameritrade, though my endorsment at the time was tepid). This is because unfortunately, the competition has been not been better. However, there are new developments, with f.ex. CyberX coming online. Although affiliated with CyberBroker, they are not a DOE broker, but a web-based one. Price per trade is under $15, and they claim that they will not allow for "busy servers" and other nonsense Datek custormers have to deal with. They also claim very good executions, though that has to be verified (claims are easy to make, hard to deliver on). In short, they purport to be a "better, faster, more reliable" Datek. Bottom line, unlike in the past, Datek is facing credible competition for the active trader from OLBs that are not DOE brokers. If that trend continues, and they can deliver superior performance, there will truly be no longer a reason to stay with Datek. At that point, I predict Datek will experience a tremendous outflow of their most active traders. From the point of view of $ and cents, perhaps that doesn't matter to Datek - the inflow of new, semi-active investors (from their advertising campaign), will deliver greater profits than the money lost from the outflow of the higher profit but much smaller percentage of their active traders. That is fine, and from Datek's point of view may make a lot of business sense. But by the same token, active trades should realize that for reasons of self-preservation, the time is quickly approaching for abandoning Datek - this broker manifestly does not care about your interests, and in fact is working actively (by getting new accounts without improving the infrastructure) to degrade your ability to trade actively. Morgan