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February 28, 2007
Online brokers struggled yesterday, but not E*Trade
(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:
Think or Swim/20.447
Charles Schwab /43.123
Wells Fargo Brokerage/66.365
Banc of America Investment Services/81.671
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.
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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.
Posted by: Sally at March 1, 2007 11:03 AM
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...
Posted by: Bram at March 1, 2007 12:07 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.
Posted by: annoyed at March 1, 2007 08:39 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?
Posted by: Dave at March 1, 2007 11:27 PM
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.
Posted by: pitmlp at March 6, 2007 10:55 AM