Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (8536)	3/20/1999 9:19:00 AM
From: Giordano Bruno	Respond to of 99985

Focusing on day traders... March 17, 1999 Day Trading Over the World Wide Web By Stephanie AuWerter ETRADE (EGRP) and Datek, look out. There's a new online broker in town, and it just might give you a run for your money. Day-trading firm TradeScape, plans to launch an online trading Web site this week. The vision? According to TradeScape's 26-year-old founder and CEO Omar Amanat, it's all about offering day-trading technology to the online investor. Day Trading vs. Trading Online Up until now, New York City-based TradeScape has been primarily a site-based day-trading firm, renting seats to frenzied stock-traders who pay for use of the firm's terminals and software. It has offices in six cities filled with rows of young men staring into flashing computer monitors (think 1980s video arcades). These "investors" trade more stocks in a day than you might trade in a year. One hundred trades is the norm, and 400 is not unreasonable. These traders operate in a world where trades are executed in a matter of seconds. Waiting minutes -- or even hours -- for a trade confirmation is inconceivable. Indeed, comparing a trade placed on-site at a day-trading firm to one executed at an online brokerage is like "comparing the space shuttle to a model airplane," says Mike Shokouhi, a Nasdaq spokesperson. That's in part because there is no middle man involved. These traders can trade directly on Nasdaq or via an electronic communications network (ECN), which essentially works like a mini exchange. TradeScape.com Will TradeScape's online service be just like its on-site centers? Not exactly. First of all, the service could fall prey to crashed servers and other glitches just like ETrade and Charles Schwab (SCH). And TradeScape's Web pages will only download as quickly as your modem allows. Finally, don't expect a roomful of helpful customer-service reps to answer your questions when you have problems with your trades. Even though trading won't be available until Friday, 700 users have already signed up for TradeScape's free Level II quotes. Amanat anticipates 10,000 users by the end of the year. But the site will be able to handle 20,000 users executing 100 trades per minute, he claims. Presumably, that means fewer delays in transaction processing. TradeScape.com's rock-bottom commissions are another attraction. To trade 100 shares, you'll pay just $1.50, says Amanat. And if you trade more than that, the commissions get even cheaper. Those trading 100 times a day will pay just 90 cents a trade. And there's no monthly service charge, he says. Still, to earn those commissions, the minimum opening balance requirement is $35,000. This is bound to keep many active investors nestled in with their current online broker. If you're interested in Level II quotes but are happy with your current broker, you can still register to use the service without opening an account. (Level II quotes show all the bid and ask prices for Nasdaq stocks.) Of those online brokers currently offering Level II quotes (and most of them don't), most charge for the quotes or, like ETrade, only offer them to their most active investors. But if you're uncomfortable giving out your Social Security number online, you might want to hold off. Right now the online application requires this information. Amanat says the application will soon be revised to omit this detail. Whether TradeScape.com will succeed with its $1.50 commissions and free quotes is hard to say. ETrade spokeswoman Lisa Nash is dubious. "I'd like to see their business model," she says. But, as we said, it doesn't cost you anything to use the quotes. And, if you want to find out what it's like to be a true day trader, you can download TradeScape's free FirstLevel game, which trains you in the fine art of buying and selling stocks in a matter of minutes. (Of course, it's hard to duplicate in a game that sickening feeling of losing real money.)