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ECT News Community   »   E-Commerce Times Talkback   »   Re: The Changing Face of Online Stock Trading

Re: The Changing Face of Online Stock Trading
Posted by: Keith Regan 2002-07-17 16:22:02
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As the stock-market bull remains in a lengthy hibernation, the number of people who
qualify as active online traders has tumbled. But the sector has kept its footing, thanks
largely to established brokerages that are offering multichannel options to customers. "A
lot of the houses have gone straight for the affluent investor, and they've locked them
in by saying they could trade any way they want," Kathleen Sindell, a professor at Johns
Hopkins University, told the E-Commerce Times.

Re: The Changing Face of Online Stock Trading
Posted by: rmayer 2002-07-18 17:22:14 In reply to: Keith Regan
As a seven-year member of the securities industry and specifically the "online" and active trader segment, Sindell's findings sound accurate, but do they warrant attention? Does it surprise anyone that "online" trading accounts have dried up at these big firms? That these firms are seeking the financially independent because the herd has gone and blown themselves up? It shouldn't, we've known this for months and months, just ask your taxi cab driver. But wouldn't it be a surprise to find out that a lot of these "online, web based" accounts have simply moved to firms that can support the type of trading that was going on and educating them how to trade, not just actively invest.... now this might deserve some attention.
The browser-based, online platforms of those firms mentioned have never been anything more than a portal for investors to buy and sell a few shares as investors. Not a tool for individual investors-turned-traders to trade against professionals with sophisticated trading software and millions of dollars behind each order. It's kind of like entering a Nascar race but showing up in a Yugo... not much of a chance.
Sindell is right in saying things will be different the next time around... traders will learn to trade and investors will learn to invest, no confusion between the two. The rules of one endeavor should not be forced onto that of another, but they were and now we have a study reporting the consequences. I'd be much more interested in a study of those firms that have provided the tools and the education for traders (not investors) to see what happened to them over the last year or two... that might be newsworthy.
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