Day Trading and Direct Access: Taking Center Stage

May 7, 2001

Abstract

Boston, MA, USA May 7, 2001

Day Trading Keeps on Growing   

Day trading market continues to grow, despite brutal downturn in retail brokerage

A new report from Celent entitled  shows that not everyone in the brokerage industry is ruing the year 2000. Direct access providers, catering to very active day trading segments, have consistently reported rising volumes, which are expected to continue to grow. While the occasional or recreational day trading community has quickly dropped in numbers, those professional, experienced traders are still driving volumes in the market. The direct access firms, largely unfazed by recent downward market activity (in fact using it to increase volume) have begun to branch out past its traditional customer base.

Many brokerages are beginning to develop both retail and institutional services out of their core offerings. Some direct access firms, such as CyberTrader and Tradecast have been bought by larger retail brokerages (Charles Schwab and Ameritrade, respectively). Others are developing new services on their own or are partnering to provide these offerings.

The providers of day trading or direct access technologies reviewed in this report include:

  • A.B. Watley
  • Blackwood Trading
  • CyberTrader
  • ProTrader Group
  • Spear, Leeds, and Kellogg
  • Townsend Analytics
  • TradeCast
  • Tradescape
  • Watcher Technologies

According to Fritz McCormick of Celent Communications, “Direct Access technologies represent the next big step for brokerage firms. The impact will be substantial, as both discount and full service firms adopt the technology to some degree in order to differentiate themselves from competitors. It will also allow them to court more active trading segments, hopefully lifting currently low trading volumes.”

A Table of Contents is available online.

of Celent Communication's Retail Securities & Investments and Institutional Securities & Investments research services can download the report electronically by clicking on the icon to the left.

        

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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA  May 3, 2001

Direct Access: Taking Center Stage

Return to report abstract  

 

INTRODUCTION

3

MARKET OVERVIEW

7

 

History

7

 

Today's Challenges

7

 

Regulatory Issues

9

DIRECT ACCESS TECHNOLOGY PROVIDERS

11

 

A.B. Watley

11

 

Blackwood Trading

12

 

CyberTrader

13

 

ProTrader Group

13

 

Spear, Leeds, and Kellogg

14

 

Townsend Analytics

14

 

TradeCast

15

 

Tradescape

15

 

Watcher Technologies

16

 

Others

17

CONCLUSIONS

18

        

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