Market volatility is unnerving investors, but for Quote.com Inc. and other Internet-based information providers, it has its advantages.
As brokers, investment advisers, and casual investors alike keep a closer eye on market movements, they want the most up-to-date prices at the lowest possible cost, which steers them to the Internet.
"Serious traders and active day traders that trade a large volume have tight risk controls," said Gibbons Burke, product manager at Quote.com-the leading source of financial market information on the Web, according to the New York-based Internet rating agency Media Metrix.
"One or two ticks upward or downward can make a big difference," said Mr. Burke, who is based in Mountain View, Calif. That is to say nothing of the several-hundred-point swings experienced in recent days.
In addition to providing stock quotes to more than 300 Web sites- dispensing 200,000 quotes per hour in peak periods-Quote.com is selling live Internet-based data feeds for a fraction of the price of dedicated terminals from such companies as Bloomberg or Reuters.
But the Web has lacked the reliability of such direct connections.
Ordinary Web-based quotes "don't cut the mustard" for institutional users, Mr. Burke said. "It is like the difference between a photograph and motion picture: A motion picture shows fluid and dynamic movement, and the markets are fluid."
To provide such a moving picture Quote.com introduced a more advanced service, LiveCharts, last year, and a still more advanced one, QCharts, a few months ago.
One of Quote.com's first bank customers for such service was First Busey Securities Inc., the brokerage division of First Busey Corp., a $953 million-asset banking company in Urbana, Ill.
"We have five representatives and four assistants" with trading licenses, said Nancy Geubelle, investment associate at the securities division, which has $350 million of assets under management. "We needed a pricing system we could afford."
The securities division had received market information from Reuters' Quotron service through its clearing firm Stephens Inc. First Busey selected Quote.com when it switched to BHC Securities Inc.
Quote.com's QCharts service costs $130 a month for market news and pricing information, plus $12.50 a month in access fees for the New York Stock Exchange, American Stock Exchange, and Nasdaq. Individuals electing to receive only pricing information pay $110 a month.
Delivered over the Internet using a protocol developed by Quote.com to accelerate the transmission of market data over phone lines, the service offers an unlimited number of current stock quotes and charts along with time and sales information for every executed trade.
Introduced in June, the service has attracted 500 users in addition to the 1,000 running Quote.com's LiveCharts, a Java-based application introduced in August 1997.
Reuters is also moving onto the Internet, having just re-launched the old Quotron service with current market information for $175 a month, plus exchange fees.
Like QCharts, the Quotron product is a downloadable software application. It compares to the high-end Reuters Plus product line, which can cost up to $1,000 in setup charges, plus $425 a month per desktop. A Web-based version of Reuters Plus, after a similar setup charge, costs $75 to $150 a month.
"An awful lot of what people look at on the Web is delayed information," said Davis Gaynes, executive vice president of sales for Reuters America Inc., New York. "When there are 100- to 200-point swings in an hour, you'd better have real-time quotes when you make a decision."
Ms. Geubelle at First Busey Securities said Quote.com's QCharts lacks some of its rival's features, including scrolling news headlines. But she said she was not concerned about the reliability of the Internet for price quotes, even in a time of great flux.
The primary targets of QCharts and LiveCharts are financial institution advisers and active portfolio managers, but Quote.com officials expressed surprise at the extent to which many so-called "casual traders" follow the daily ebb and flow of the market.
Though only 25% of those using Quote.com's LiveCharts consider themselves full-time traders, users average 5.6 hours a day running it on their computers, Mr. Burke said.
LiveCharts customers averaged 36.5 trades a month, and-at least until the recent market fluctuations-held stock purchases an average of 16 days and a median of 2.3 days. LiveCharts costs $79 a month for real-time service, plus exchange fees.
Among users of the more powerful QCharts application, 8% identify themselves as full-time traders, said Mr. Burke. Users averaged 3.5 hours a day running the application and 29 trades a month; they held stock an average of 28 days and a median of seven.
"These guys are holding down other jobs and using this as a way to trade in the markets," said Mr. Burke.
In addition to 250,000 users registered on the Quote.com Web site, the company provides market quotes to Citicorp, Banc One Corp.'s First USA division, Atlanta Internet Bank, and the four largest Web brokers-Charles Schwab & Co., E-Trade Group, Fidelity Investments, and Waterhouse Securities.
Quote.com also has announced it would create a news and market information section for the Web site of the insurance company SunAmerica Inc. of Los Angeles.
"Quote.com's ability to deliver comprehensive and timely financial market and security data made them the obvious choice to bring this financial information to SunAmerica's policy owners and financial professionals," said Huntley W. Bakich, the insurer's vice president of electronic commerce.
"This is a one-stop resource for anyone interested in retirement planning," Mr. Bakich said.
Other insurers working with Quote.com include John Hancock, Allianz, Allstate's Lincoln Benefit, Guardian Life Insurance Co., and Phoenix Home Life Mutual Insurance Co.