The economic turmoil of the last six months has not stopped trading and according to industry sources, many online brokers are looking for ways to aid their active traders.  One way they have decided to do this is by offering online brokers and traders more online tools to work with, making the entire process easier to accomplish from start to finish.  Among Internet brokers who have begun offering more sophisticated tools to the clients are Charles Schwab E*Trade Financial Group, TD Ameritrade, and Scottrade.  Trading analytics, market scanners, pre-trade analytics and charting capabilities are just some of the new and improved services being offered.

Says Christopher Larkin, the VP of retail brokerage for E*Trade Securities, “Even though the markets have been sketchy at best, you’ve seen the volumes on the online broker side pretty much hold up.  The customers are more sophisticated.  They have better risk management strategies, and customers are embracing options and stop orders.”

“Volatility is an opportunity.  If we’ve learned anything from history, smart people are trading now. The people who learned nothing are selling out; the people who understand the market are buying,” agreed Adam Honore, senior analyst at Aite Group.

Active traders, however, are looking for the tools that can help them make the right, informed decision.  They are looking high service levels from the online brokers, educational seminars, and access to options experts, and hedge risk guidance.  In an effort to provide these services, Charles Schwab launched the Schwab Trading Community.  This online community offers traders a closed environment in which they blog with one another, view live webinars that meet the educational requirements desired, chat with other traders, and trade strategies among other things.

Honore also feels that online brokers need to focus on the direction active traders are heading. “You can throw as many bells and whistles as you want [at traders], but you ultimately have to head multi-asset,” he stated.  He feels that active traders will eventually want to trade like hedge funds and that they require both the tools and the education to accomplish this.

Many companies are starting to branch out into multi-asset trading.  TradeStation Group is already seeing close to 50% of their trades being in non-equity items such as Forex and future contracts.  Charles Schwab already has a global investment team in place that buys and sells equities on 35 to 40 different foreign exchanges for their clients.  TD Ameritrade is helping customers learn about and choose the right investments in fixed income equities and CDs.

Online brokers are starting to add more to their option functionality in order to stay competitive with each other.  Says Honore, “I would say that everybody branched out into offering a unique flavor of options.”