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on a network instead of competing with kids in America playing Star Wars X-Wing with other kids in Japan. When your money is at stake, you need the most dependable access possible. You don't want to put yourself in John Glenn's position, who was quick to note that he wasn't comfortable riding in a space rocket containing thousands of moving parts each built by the lowest competitive bidder. You don't want to risk your economic life with a local access provider whose services are comparable to the defective rubber "O" rings which wrecked a multibillion dollar Challenger rocket. |
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Don't confuse DAET with ordinary e-mail-type electronic trading systems (like E-Trade, AmeriTrade, or E-Schwab). Investors think they are trading electronically when all they are doing is calling their discount broker on the computer instead of the telephone. The brokers love e-mail because they don't even have to pay anyone to answer the telephone or listen to the customer's complaints about the service or quality of execution. |
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When the market crashed in late October 1997, active traders with DAET trading machinery had no trouble executing their orders. Customers of Merrill Lynch and other e-mail-type systems could not even reach their broker because of the difficulty in logging on their trading networks. Many customers could not trade because their broker's system could not manage the market activity. In fact, your local telephone company generally figures that a small percentage of the population will be using the phone network at any given time. If everyone in the same city wanted to use the phone at the same time no one would get through. |
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There are positive aspects of the electronic trading revolution. The difference between the crash of 1987 and the crash of 1997 was the operation of the electronics and the circuit breakers. In 1987, brokers refused to answer their telephones in a meltdown market. In 1997, investors could execute their orders electronically as long as they could log on to their trading network. |
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Most people will tell you about the stock they wanted to buy at $10 but their broker told them that they were lucky to |
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