A New Breed of Traders
The fact is that hope springs eternal, at least in the discount broker world. Despite a brutal pricing war in recent years, a decline in online trading that crimped profits at the biggest retail sites, and the industry’s feast and famine track record, two new discount brokerages aimed at so-called active investors are opening for business this week. The sites, OptionsHouse.com and Just2Trade.com enter a crowded field, led by such names as E*Trade Financial , TD Ameritrade , Fidelity Brokerage, Bank of America , OptionsXpress and Scottrade. Both are offering flat-rate trading and claim to have newer, superior technology. Good news for them that the markets have been on an upswing, drawing investors back to online trading.
Just a couple of years ago, the biggest discount brokerages were struggling with declining revenues from lower trading volumes, prompting them to slash fees and do other promotions to generate trading volume. There’s a new breed of day traders, or at least a new venue. Instead of setting up shop in day trading firms, traders can sit around their living rooms trading and still have access to the sophisticated analytical and market data information they once could only get at a firm. Mostly the new sites are offering the latest in trading technology and professional trading tools, such as market data and other information, in a slimmed-down brokerage offering that doesn’t clog the screen with a lot of excess stuff. They are aiming at the niche of investors who already know what they want, or who have access to research and other information elsewhere and who aren’t confused about how to set up and execute trades.
OptionsHouse.com debuted Monday offering flat fees of $9.95 a trade, regardless of the size of the transaction. Options are becoming increasingly popular with retail investors who want to hedge their stock trades or dabble in a new market. Just2Trade.com is an offshoot of Success Trade Securities and is offering unlimited $2.50 a trade to active traders and low margin interest rates
