That's The Ticker

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Holders also need to study factors that can affect their chances of earning money from their trades, such as volatility indicators, which measure the degree to which a stock’s price fluctuates and thus the likelihood that it will hit the strike price and make a profit. Szeto knew that the more data he could clearly display, the better the trader’s experience with the website would be. “The trick was to appeal to experienced active traders, giving them all the information they need, but in a way that would not cause the less experienced folks to flip out,” he says.

He designed a core screen at the center of the site that displays portfolio holdings, which can be expanded to show details with a single click of the mouse. One click on any stock symbol takes the user to a pop-up menu of additional trading options or information. Across the top is a smaller menu giving the full details of the client’s account, including the capital invested and how much remains. Down the right side of the screen is a markets window, where a trader can monitor stock price movements while placing a trade in the options. “The last thing anyone wants to do in a dynamic market is click back and forth from one page to another just to be able to see the data they need,” Szeto says. Indeed, the OptionsHouse site doesn’t even have a “page back” button.

Some of Szeto’s solutions are so obvious one wonders why they haven’t been implemented on other sites. For instance, stocks that are falling or positions that are losing money are shown in red; stocks that are gaining or profitable positions are displayed in green. “It’s not rocket science, but it’s handy to know at a glance what’s happening,” says Szeto. His own favorite feature is the “risk viewer”: Investors can click on a tab and be told what will happen to their positions if the market moves 5 percent in either direction. “This was one of the most widely used features during the market sell-off in late February,” Szeto says.

Peak6 isn’t the first financial firm to apply design principles to make vast quantities of data more digestible to traders. Companies that make a living supplying data, such as Bloomberg or Reuters, retain teams of design consultants to advise them. On brokerage desks, skilled traders have favorite ways to display data, with the most useful charting tools closest to hand on a central screen. And back in 1997, Fane Lozman, a former Marine fighter pilot turned futures and options trader, launched a new kind of trading screen that drew on his understanding of instrument panels, using a variety of rectangles, lines, and arrows to indicate which kinds of securities were moving and what that movement signaled.

While Lozman’s solutions were conceived for professionals who could digest complex data, online firms that catered to individual investors—people who trade for themselves as an avocation—still based their designs on the old paper “tickets” used to buy and sell stocks on the floor of the New York Stock Exchange. Users would have to know the ticker symbol for each option—say, the July option to buy Dell Computer stock at $35 a share—before they could place a trade. Professionals commit hundreds of these symbols to memory, but amateurs often have to flip back and forth between screens to find the right code. Szeto simply did away with the need to insert a ticker symbol; instead, clients click on the July $35 Dell call option, and the OptionsHouse system converts it automatically into trader lingo.

Szeto isn’t entirely satisfied with the project, however. He’s already refining the site to offer an interactive menu that will walk newer traders through the process one step at a time. “We’ll start with questions like, 'What is your goal?—Do you want to lock in the price of your stock, or protect your portfolio?’ then move on to ask if they want to buy or sell, and end up presenting them with a couple of trading ideas—all in just two screens.” Meanwhile, the Peak6 professional traders are demanding more of Szeto’s time to make their own data easier to manage.

It’s too early to tell how OptionsHouse will fare in the battle against giants like Schwab or specialist competitors like OptionsXpress. The company, which is privately held, declined to disclose the number of customers who have signed up for the trading service since its launch in January. As options trading continues to boom and stock markets become more volatile, however, more traders are likely to turn to the new system to execute their orders. “One thing is already clear: People who try the system are sticking with it,” says Hass. “Our retention rate is higher than we had hoped for, and we believe that will spill over into word-of-mouth recommendations—many of which will be due to the way that this ’look’ is something created and designed from scratch to meet this market’s needs.”

Provided by I.D. Magazine—The International Design Magazine