Investors now have quite an array of online brokerages to choose from, should they wish to move away from traditional stock brokerages, which are often criticised for offering too little control, insisting on a middleman who makes money from stock trades and for the length of time it takes to confirm a trade. Huge US online brokerages such as E*Trade and Ameritrade have reshaped the world of stock trading, yet these still do not offer completely independent control over trades. Now direct-access firms are emerging that offer total control, amongst them Edgetrade.com, one of the new breed of direct-access firms that use Internet technology to go one better than a number of online brokerages.
Direct-access operations such as Edgetrade.com are touted as better, faster and cheaper and investors can make savings on each trade by doing it themselves and it can be a relatively quick process. One avid trader commented: 'Now, at the touch of a button, before you can even take your finger off the button, you can own a stock.' Whereas some Internet brokerages have failed to fully eliminate the middleman (some, like E-Trade, are building a team of financial advisers), direct-access firms offer software that lets all the buyers and sellers of a particular stock deal directly with each other. No salesman is involved – not even a broker to execute the trade.
The stock market can sometimes resemble a battlefield
and direct-access firms view their software as an
effective weapon. The tools help an investor scan
the entire market for the best available price before
buying or selling a stock. Joe Wald, CEO of New York-based
Edgetrade, said: 'The technology gives the ability
to have the order reflected directly in the marketplace,
without stopping at the middleman's desk, where they
can control the order from that point forward. Without
that middleman trying to make money on your order,
you're in control of the execution.'
Russell Keane, vice president of equity research at Keefe, Bruyette & Woods, a US investment research firm specializing in banking and financial services, commented: 'We're an impatient society. With stock trading, we want it to be a case of "tell me if I got it, and I'll be on my merry way."'
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