Officials at leading on-line brokerage firms said they were pleased at how their Web sites performed during recent record trading days on the securities markets.
The market downturn in October 1997 had left many among the new breed of interactive brokers reeling from an inability to keep up with orders, and from customer service complaints.
Those problems led the companies to build capacity for extraordinary demands, and they fared much better this week, industry observers said.
Though the on-line brokerages had been working behind the scenes for months, only last week were customers able to gauge the results.
"They have performed far better this go-round," said Nicole Vanderbilt, senior analyst with Jupiter Communications in New York.
Alex Stein, a principal with Concord, Mass.-based Gomez Advisors, a research and advisory firm, said the "number of failures was insignificant."
Using an automated system that measures the responsiveness of financial institutions' Web sites, Gomez Advisers found that over the three days of record volatility the average time to deliver a page during the heaviest trading time was five seconds or less. That was "much shorter than a year ago," Mr. Stein said.
The on-line brokers scoring the highest were Charles Schwab & Co. at 1.89 seconds and National Discount Brokers at 1.95 seconds.
On the slower side were Ameritrade, 13.3 seconds, and Discover Brokerage Direct, 8.29 seconds.
All did better than last October.
The World Wide Web is still a young delivery channel, and the on-line brokerages are "still learning their lessons," Ms. Vanderbilt said.
Financial institutions are used to running proprietary systems, which they control and for whose performance they are accountable. The Internet, essentially a public utility, puts them at the mercy of forces beyond their control, such as modem speeds and variable levels of activity.
Ms. Vanderbilt said that as the on-line brokerage industry keeps adding accounts and deals with ever-growing volumes, it will always have to make adjustments.
At E-Trade, "all trades were executed without any problems," said Lisabeth Weiner, a spokeswoman.
The Palo Alto, Calif.-based brokerage's Web site is equipped with several analytical and research tools for keeping on top of the market. "The access to the information and learning how to make decisions on what they want to do over time gave clients the control they needed to go in and execute a trade smoothly," Ms. Weiner said.
Trading volume at Discover Brokerage Direct, the Internet trading service of Morgan Stanley Dean Witter, did not set records, but there was a 30% increase over average volume, according to Thomas J. O'Connell, executive vice president.
Discover Brokerage more than doubled its number of servers, upgraded hardware, and added a data center in Utah to handle up to three times October's volume. Mr. O'Connell said the earlier glitches were due not to internal problems but rather to delays on the Internet and in communications with exchanges and market makers.
"Compared to that, we get an A-plus," he said this week. "It was a really a good experience in terms of handling the operation side of it."
Charles Schwab, the largest on-line broker, last week handled 309,000 trades on Monday and 275,000 on Tuesday. Last October it processed about 235,000 on its busiest day. Its daily average is about 130,000.
Schwab handled 19.8 million total hits last Monday and another 21 million last Tuesday, both record numbers and almost double the 11 million in last October's peak.
"The system worked fabulously," said Greg Gable, spokesman for the San Francisco-based company, which handles 60% of trades on-line, up from 40% last October.
