In the News: Viewpoint

Q: There are so many deep-discount brokerages on the Web - what made you decide to launch DIRECT TRADE?
A: When we started DIRECT TRADE, there were actually very few futures and options brokerages online. Most of them were just Web "storefronts" for traditional phone-and-paper operations. We opened DIRECT TRADE to change that.

Q: How?
A: In two ways: first, by going all-electronic so every Client order goes immediately to the computer or specialist executing the trade. The industry is catching up with us here - paper tickets are pretty much disappearing.

But DIRECT TRADE is still way ahead in integration - we use a single, custom order management system for news, trades, account information - everything. We don't string together software from four or five different vendors - and we know how the system works, because we designed it.

We offer two trading platforms to give clients a choice. They can trade with a software-based platform and/or a web-based platform. Clients automatically have access to both when they open an account, and of course, they are offered free of charge. We recognized early on that there are inherent benefits to both trading via a software application and a website.

Q: Can you expand on DIRECT TRADE's offering of two platforms?
A: Few firms gives their customers a choice of multiple platforms. And those that do, unfortunately, are offering completely different and unrelated products that are from different vendors. These firms usually charge various and differing "platform fees", which is something DIRECT TRADE has never done.

The biggest drawback of using multiple platforms from other firms is that since the products are third party there is generally no commonality in the functionality or data exchange between them. Each platform is totally different and independent.

The client may have to use one platform to get a decent charting package, and another application for its newsfeed. And if the client wants to trade via a website or software, then that is another application they need to learn to implement and use. Not only does it confuse the customer to learn how to use two or more distinct products, but it goes further, as these platforms generally do not communicate with each other or share the same data. So when you trade at a firm that does not have control of their platforms, your trades on one platform will not show up on the other. They are unrelated to each other and operate independently.

This has been a major focus at DIRECT TRADE and why we have invested so much money in our technology. Both of our platforms share the same features and the same "trading engines" and if you trade on one, the trade instantly pops up on the other. It is exactly how it should be.

Q: Does your Silicon Valley location give you a technology advantage?
A: Not really - the same technology is available to any brokerage willing to invest in it. But here in San Jose, we pay close attention to technology issues - and we make those technology investments. For example, our servers can handle fifty times normal traffic, because we know what a market spike or denial-of-service attack can do to service when the servers aren't prepared.

Q: So keeping DIRECT TRADE available is a priority?
A: Absolutely. As a futures trader myself, I insisted on high availability. Most futures and options money is made during rapid market swings at high volume - when everybody piles into the market, and Web traffic is high. So we designed DIRECT TRADE with extra capacity, security and technology. Our Clients count on us for access and execution during those peaks, when the opportunities are greatest.

By the way, that's another benefit of both a Web page trading platform and a desktop software-based platform. A highly-visible Web site may attract hacker attacks or even extortion attempts. Desktop trading portals are less public, and less vulnerable. So our availability strategy goes right to our Clients' desktops - and traders feel more comfortable using a tool they control themselves.

Q: Doesn't all that investment put pressure on rates?
A: A little - but any trader who's been in the market for a few years knows that one bad execution wipes out years of discounts commissions. DIRECT TRADE offers very deep discounts, but we never compromise on execution, or scrimp on technology investments. Our goal is to offer the best execution value in the industry - that's where a brokerage really serves its Clients.

Q: Any tips for new traders?
A: Execution, execution, execution. One new idea I like is to keep funded accounts with two brokerages, so you have a backup in case of a major disruption. Your ideal backup would have no monthly fees, of course - like DIRECT TRADE.

Q: What do you see on the horizon in futures and options?
A: Greater velocity, greater volatility, everything's global and around-the-clock. Really huge opportunities for traders who can keep up with events and really huge risks when they can't. High-performance, integrated end-to-end trading will be essential - and that's exactly where DIRECT TRADE plans to extend its lead.

Please note that there is a risk of loss in futures trading.