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To: The Osprey who wrote (324)	6/27/1998 11:57:00 AM
From: Savant	Respond to of 4201

When the "protection breaks"

To: The Osprey who wrote (324)	6/27/1998 12:46:00 PM
From: Apex	Read Replies (1) \| Respond to of 4201

Interesting read from the Toronto Star on Day Traders Computer trading Day trading takes tough nerves, savvy and a chunk of cash Computer system lets traders flip stocks in seconds By Robert Cribb Toronto Star Business Reporter It's enough to give the Bay Street crowd cold sweats. Market makers, the middle men standing between investors and their stock purchases, are starting to get squeezed out by computer technology that allows anyone with enough money and guts to buy and sell solo. Canada's first day-trading firm - Swift Trade Securities Inc. - is up and running in Toronto. And while it's still fledgling, it's an intriguing distant early warning for what's to come. Day trading is nothing like long-term investing. Using special software, day traders scan computerized Nasdaq stock listings looking for momentary trends. When they spot a stock on the move - up or down - they buy in with a single keystroke. Then, they wait, eyes peeled on numbers flashing on the screen, for that moment when they can sell out at a profit. Often that means less than a minute or two. ''We don't have to know the stock or it's history or even what the company makes,'' explains Charles Kim, vice-president of operations for Swift Trade and an avid day trader. ''We just want to get in and get out with 25 or 50 cents. I don't care if Microsoft makes glue or food products or if the news was bad yesterday. I'm looking for a 30-second spot where I can get in and get out with a profit.'' It may sound like small potatoes, but think again. Experienced day traders snatch up 1,000 shares with every stroke of the ''buy'' key. So a quick sell that earns 50 cents means a $500 profit in as little as five or 10 seconds. That means day traders with intuition and savvy - and often no financial background or experience - can earn upwards of $800,000 a year, says Kim. And where there's risk and reward, there's those willing to play. The day-trading business has been exploding in the U.S. over the past couple of years. There are about 2,000 full-time guerrilla market-makers going head-to-head with corporate giants such as Merrill Lynch, Goldman, Sachs and Morgan Stanley in the United States today. A seat at the day-trading table comes with a steep ante - $50,000 (U.S.). And newcomers are warned they must be prepared to lose 10 to 15 per cent of that in the first few months as they ride the learning curve. Traders must also sign on for a one-month training course that costs $1,500 (U.S.). That money is returned to their trading account once they start buying and selling. Swift Trade sets them up with a computer, the software they need and the Nasdaq feeds, then charges 2.5 cents for each trade. But there's no guarantees. It's taken Kim six months to get close to his initial investment of $145,000 (U.S.). After taking some big hits early on, he's recovered to within a couple of thousand dollars, he says. <P> ''I don't worry about it. You lose today, you win tomorrow.'' <P> Aishling Science, a 26-year-old Torontonian, has gained a reputation as prodigy at Swift Trade. With an initial investment from her father, she has been playing the stock market full-time for the past couple of months with uncanny success. But after a few $1,000 days, there came last Tuesday, a $2,000 one-day loss. ''It was a hugely bad day. I knew I should have walked away from the computer earlier, but I just kept thinking I can come back.'' The allure is contagious, as I found when I tried it. For my experimental gamble with day trading, I made a 59-second investment in Yahoo, reaping a tidy $125 profit. Next, a 13-second spin with Intel, bringing my tally up to $187. And finally, a nine-second trade with Dell stock. My balance sheet after a minute and a half of trading? $312 (U.S.). It's the kind of control many investors have longed for. Relying on brokers means phone calls and delays that can cut into profits. And anyone who has tried to dump stock in the middle of a downfall knows it can be difficult to get individual investor orders filled. Day trading is poised to grow for the same reason information technology has expanded in homes - it empowers individuals. Contents copyright © 1996-1998, The Toronto Star User interface, selection and arrangement copyright © 1996-1998, Torstar Electronic Publishing Ltd.