Online brokers struggled yesterday, but not E*Trade

Posted by: Aaron Pressman on February 28, 2007

(Updated March 2 with Vanguard comment)

The good folks at Gomez, Inc., a market research and consulting firm, forwarded some of their data about the performance of online brokerage web sites during yesterday’s melt down and the news isn’t pretty. Of the major online firms, response times plummeted during the final hour of the trading day as their web sites struggled to manage a rush of orders. Here’s how long, in seconds, it took to get a response to a transaction on average from 3 p.m. to 4 p.m. yesterday:

Brokerage/Response Time

E*Trade/4.974
TradeKing /12.004
Options Xpress/13.373
TD Ameritrade/15.534
Think or Swim/20.447
FirstTrade/20.448
WallStreet E/20.557
Scottrade/23.653
Charles Schwab /43.123
Muriel Siebert/43.302
Wells Fargo Brokerage/66.365
Banc of America Investment Services/81.671
Fidelity/96.014
Vanguard/208.43

Obviously, some of the biggest online brokers are going to be reviewing their systems today. For the sake of comparison,the average response times averaged from 4 to 22 seconds in the same hour on Monday.

UPDATE: A spokeswoman for Vanguard says the firm happened to be doing routine maintenance that day and had many of its servers off-line. “It was slow between 3-4, but everyone’s transactions went through just fine,” she says.

Reader Comments

Sally

March 1, 2007 11:03 AM

I'm with Etrade - should I be worried? I don't trade a lot, just a few shares a year, but this makes it seem like the brokers aren't prepared technologically.

Bram

March 1, 2007 12:07 PM

Etrade i think came out of this in flying colors. It runs on ope source technologies (Most of it)...Microsoft need to learn from this...

annoyed

March 1, 2007 8:39 PM

I'm glad someone noticed this. Fidelity's was incredibly slow. The market data graphs didn't work and trying to get account balances and quotes was extremely slow.

Dave

March 1, 2007 11:27 PM

I dont think this had anything to do with the brokerage infrastructure. I used to work for Schwab and their back-end systems are simply amazing. They are built to handle many times the maximum load they should ever see... But a chain is only as strong as it's weakest link. Could BW do an article where they interview the brokers and investigate what really happened?

pitmlp

March 6, 2007 10:55 AM

I disagree with this assessment as I trade through E*Trade. They absolutely failed during the excitement. I had delayed quotes from them - my live quotes were approximately a minute behind. One trade for a basic ETF sat in the trading queue for 30 minutes. I canceled it and re-entered it and it again sat. I had to call to get it executed. An inquiry into the trade led to an adjustment but it took an hour of my time to resolve the issue. Their new technology for their active traders was a big step backwards as opposed to forward. They don't get it - don't let this article make you think otherwise.

Tony

August 9, 2007 8:51 AM

eTrade was terrible two days in a row (yesterday and today). Ten minutes to complete a trade at opening. Just terrible; cost me a K.

credit card

August 24, 2009 1:16 AM

Online brokers have a lot on their hands I don't know the specifics but all I know its a tough job being an online broker.

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About

Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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