Trading moving to
all-hours transactions

By Andy Walker, Cyberwalker Media Syndicate

The investment trading business may still keep bankers hours, but the all-hours Internet fuelled by a tech-enabled consumer is forcing a shift in tradition.

"Trading hours are starting to be extended. Island ECN is now doing after-hours trading. Virtually all the big eight ECNs will be going that way," said Colleen Moorehead, president of E*TRADE Canada, a discount and Internet-based investment brokerage.

An ECN, or electronic trading network, is an electronic meeting place for institutions and brokerages to display and match stock orders.
On Sept. 15, Island ECN, which matches over 100 million shares per day, expanded its operating hours by almost three hours at the end of the day. It now offers service from 8 a.m. to 8 p.m. The New York City-based service attributed the expansion to customer demand.

In Canada that shift is being considered by the investment community, but any changes in trading times is subject to approval by the self-regulating Investment Dealers Association.

"It's further along (here in Canada) than the investigation stage," said Royal Bank Action Direct's Rick Kelln, who is VP for the Prairies, the Northwest Territories and Nunavit. " A lot of thought has gone into it, but we're is not going to see it in next few weeks, put it that way."

Kelln said it's likely Canada will eventually follow the U.S. lead, but it will take a few years for regulations to change and the trading industry and exchanges to implement the idea.

The move toward eventual all-hours trading is driven by public demand, explained David Zubot, TD Waterhouse's Edmonton branch manager.

"It has to do with the convenience factor," he said. "Also, the market is a little more global and...after hours trading meets the needs of the global investor."

Meanwhile the Internet is driving other changes in investment trading.
Access to information is at the heart of the revolution.

"I look at our charts and technical analysis pack on our service -- I worked in the full service industry for years and never had anything that good," said Moorehead.

Kelln concurs. "As we move forward the speed and access to information will be the key to electronic trader," he said.
That information has attracted more than the tech-savvy trader to the Internet. The not-so tech-savvy is being drawn to the Net.
"We're seeing people who are traditional broker clients, people who aren't necessarily familiar with technology," said Zubot.

They are the traders that see it worth their while to learn the technology to gain an advantage in their trading.

According to Moorehouse, by the end of 1998 there were approximately 200,000 electronic trading accounts in Canada - which included Internet traders and those that dialed their modems directly into the brokerages. In the U.S. there were six to eight million accounts at the end of last year.

A growth rate of 35 to 40 per cent per year in next five years is likely, said Moorehouse, especially as the trading tools get less technical and more human-friendly.

Beyond investor analysis tools, the wireless and voice recognition technologies will also change the ways trades are executed.
Pagers are already pumping real-time quotes and alerts onto the nation's belts and purses. TD Waterhouse, which claims 60 per cent of the Canadian discount trading market, has a voice driven ordering taking telephone service that recognizes up to 9,000 English language dialects with an accuracy rate of 90 per cent.

The wireless trader will be the next technological jump. As the hardware become available, trading modules will be built for wireless devices such as palmtops and wireless modem-enabled laptops.
The next wave of cell phones are already shipping with micro-browser technologies in them that will, next year, allow navigation of Internet style content. Inevitably that will include not only investment information, but also investment transaction tools.

Possible the biggest change that the Internet will trigger on investors is lower fees. The availability of electronic and discount brokerages has already caused prices to drop to as little as a tenth of what full service brokers charge.

Competition continues to drive that price ever lower in the U.S., though it may stall here in Canada, because, said Zubot, Canadian regulations still require that an electronic trade must be authorized by investment personnel at the brokerages.

TD Waterhouse: http://www.tdwaterhouse.ca
E*TRADE Canada: http://www.canada.etrade.com
Royal Bank Action Direct: http://www.actiondirect.com/