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Microcap & Penny Stocks : Short Term Picks From the 'Whiz' Kid -- Ignore unavailable to you. Want to Upgrade?

To: Wayne Rumball who wrote (3421)	3/4/1999 11:50:00 AM
From: DR. MEADE	Read Replies (2) \| Respond to of 9115

Discover Brokerage Plans Online, After-Hours Trading By BRUCE MEYERSON .c The Associated Press NEW YORK (March 4) -- It happens after every closing bell on Wall Street. Companies report major news, professional money managers buy and sell stock in after-hours trading, and small investors are stuck on the sideline until the market reopens. But this summer, a major online brokerage plans to introduce an evening session of trading open to anyone with a link to the Internet. While this would be the first time that individuals could react to late-breaking developments, analysts cautioned that it might also expose investors to the sharp price swings typical of after-hours trading. Discover Brokerage, a unit of Morgan Stanley Dean Witter, will offer the late trading through a new electronic exchange called IndivEx, which is being launched by two lawyers who used to work for the Securities and Exchange Commission. IndivEx announced Wednesday that Bernard L. Madoff Investment Securities, a top ''market maker,'' has also signed onto the project. Market makers are a crucial link in any electronic trading system, matching buy and sell orders. The evening session, which would begin at 6 p.m. or 7 p.m. Eastern time and run for two or three hours, could prove quite popular among those who don't have daytime access to a computer and those who can't get enough of online trading during the day. ''What we're aiming at is the normal average investor who comes home, logs on to a computer, wants to place an order and then has to wait until they get back tomorrow night to see the change,'' said Discover's Tom O'Connell, noting that 40 percent of the firm's trades are placed after 6 p.m. Eastern time. ''They want to see their balances and positions update in real time, and have closure of the transaction and go on with their real life.'' Discover's move comes as online brokerages struggle to keep up with the surging, system-crippling volume of daytime trading, particularly in Internet shares. Analysts warned that even though after-hours trading has been available to institutional investors for years, the volume has remained relatively light. Without a sufficient number of buyers and sellers to balance out, stocks prices can move wildly. ''Without a lot of liquidity, the after-hours market (for individual investors) could be very volatile,'' said Bill Burnham, an industry analyst for CS First Boston. ''Investors have the misimpression that by not being able to trade after hours, they are missing out on great opportunities,'' he added. ''They're not likely to get some great deal. The cost may be higher than during the day and it might make more sense to wait.'' Eclipse Trading, the creator of IndivEx, hopes to protect investors from sudden price swings by requiring them to specify an exact price for any trade, a ''limit order'' in Wall Street parlance. A size limit such as 5,000 shares may also be set. Discover may not be the only securities firm that sees an opportunity in after-hours trading. In January, Goldman Sachs and ETrade each bought a 25 percent stake Archipelago, the operator of an electronic trading system for Nasdaq stocks. But ETrade, the No. 2 online broker, and Charles Schwab, the biggest, both said they have no plans at this time to offer after-hours trading for individuals. And Instinet, a unit of Reuters that pioneered post-market trading and still conducts the bulk of all such trades, declined to comment on whether it might develop a retail business. AP-NY-03-03-99 1850EST