"Newest Trading Play: Screen Savings"

By Theresa W. Carey

March 15, 2010

THE BEAR MARKET IN STOCKS ENDED a year ago, but a lot of online traders and investors apparently didn't get the memo. They cut back on equity transactions in 2009 -- despite the 23.5% surge in the Standard & Poor's 500 -- and instead demanded more products and services. They got them. More bonds, options, foreign exchange, commodities and mutual and exchange-traded fund offerings; more social networks to combine their talents; more education to wean themselves further from full-service brokerages and more smartphone applications to stay in contact with their portfolios 24/7.

But more than anything, they've started to get a break on prices. Commissions on stock transactions dropped at most big firms like Charles Schwab, E*Trade and Fidelity. TD Ameritrade has -- so far -- kept itself out of the fray, except for 30 days of free trading for new customers (through June 30). Others took a similar route. E*Trade just announced that new clients who deposit at least $2,000 will have commissions charged during their first 60 days of trading rebated for up to 500 stock or options transactions. Rather than imposing a time limit, OptionsHouse gives new customers 100 free trades after they fund an account.

IN BARRON'S 15TH ANNUAL ranking of online brokers, we found no sign that the pace of innovation was slowing down. New products are proliferating. Investors can now work out complicated options straddles, place orders virtually instantaneously and put their money to work in Singapore or Germany while hedging their bets in dollars or euros or exchange-traded funds.

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