Trey Robinson shies away from the term "daytrader," saying Charles Schwab's CyberTrader is designed for a much wider range of what he calls "active traders." Either way, short-term electronic trading is returning, and an array of new tools is waiting for market players, offerings on par with what any found in a corporate boardroom.
"There's a level of engagement that we haven't seen in a few years. And they're asking questions," says Robinson, director marketing for CyberTrader, Schwab's direct-access brokerage unit.
To answer those questions, and to keep traders fleeing to Web traders like E*Trade, Ameritrade and TD Waterhouse, CyberTrader has rolled multimedia software into its trading operation. Called CyberTrader Live, the on-line mentoring program offers an interactive venue that aims to hone trading skills, while providing a means to analyze market data with a much greater capacity than ever before.
The Schwab subsidiary's services are designed to help traders who buy and sell over short periods, rather than investors looking for long-term returns. "The main driver is trading for income as opposed to savings," Robinson says. CyberTrader puts these traders-for-profit into a box called "active." While that does include day traders, it also refers to individual market players traders who, while active, are not as extreme as the traditional image of the daytrader.
These Web-savvy investors were a staple of the 1990s bull market, and while they didn't disappear when the market tanked, their presence in the investor community was greatly diminished.
Now that the market appears to be rebounding, active trading is once again an attractive alternative to buy-and-hold investing and higher broker commissions. And, as they did during the last decade, discount brokerages are reaching out to this segment with the promise of on-line market intelligence. "We wanted to come up with a way to have a forum for our investors, so they could discuss and ask questions, and do that in pictures and hear a voice," Robinson says.
The added services could come in handy, because when the market improves, less experienced traders get active. "There is a demand for this new technology," says Mark Johnson, president of media company Lone Star Productions, who also operates a Web community for Internet traders. "The bull phase always draws people back in, because it's easier to play," he says. "A lot of people don't know how to short the market, so they're better off in the bull phase."
Johnson, who says he's unaware of competing products to CyberTrader Live, notes the more visual aspects of the product will be a welcome addition. "All of the guys who get normal-text screens talk about the benefits of having charts on display, or something that gives you more of a visual experience," he says. "Visual is better because you can see chart formations, and things like moving averages, which are difficult to explain."
CyberTrader Live's services include "marketcasting," which provides market data and charting patterns. Streaming market commentaries from experts, such as CyberTrader chief market strategist Ken Tower, are included, part of a service that provides premarket analysis, intraday securities highlights, market evaluations and postmarket reviews.
The new technology comes from several sources, including Pixion, which is providing PictureTalk Web conferencing software and PalTalk, which sells Web-based multimedia software. PictureTalk enables CyberTrader to securely broadcast training seminars simultaneously to thousands of traders. PalTalk's software provides the interactive capabilities.
Robert Boese, Pixion's general manager, says the goal is to place investors in a community with other investors, where information can be shared and market participants can gather valuable information from both Schwab and each other. Part of that is bringing Web conferencing to the trading game. The same Powerpoint presentations, video conferences and Webinars that are staples of corporate board meetings are being brought to short-term market players. The system's features include on-line trading courses, or live post-market classes that give instruction on using electronic communication networks, interpreting market data and understanding the psychology behind trading. Investors can inquire about a specific security and receive customized charts and expert analysis within moments.
"That helps investors flesh out their trading strategies," says Robinson, who adds that CyberTrader has been working on adding more functionality for about a year. The fact that the stock market has rebounded in that year has been a fortunate coincidence. "It's nice timing for us, and we're starting to see adoption," says Robinson, who would not say how many traders were using the product, or what percentage of Schwab's overall business came from CyberTrader.
CyberTrader's upgrade comes as Schwab introduces Schwab Personal Choice, a new range of investing services and advice for individual investors that's the most sweeping changes the discount broker has made to its technology platform since its 1998 extension of on-line access to all clients. Personal Choice structures Schwab's individual investing services into eight offerings, including low-cost active investing and ramping up to customized wealth management services delivered by advisers.
For active investors, services include Schwab Signature Trading, which offers guidance from trading consultants and premium research for investors who want access to Schwab's investing resources from the same account; and Schwab Trader, a new account aimed primarily at on-line equity and option traders who are applying for the first time on CyberTrader's technology-including the streaming market information, news and instant messaging support.
