Did Your Broker Make the Grade Yesterday?

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After a 1,000-point drop on the Dow in a matter of 15 minutes Thursday afternoon, reports surfaced that individual investors had difficulty logging on to their online brokerage firms' websites to conduct trades. With the market going through the biggest intraday point drop in history, some speculated that certain sites may have crashed because of high trading volume.

I talked with spokespersons from the major online brokers, none of whom said their websites experienced outages during yesterday's tumultuous trading session. Here's what they had to say:

Charles Schwab (NYSE: SCHW  ) : Schwab's platform experienced intermittent access issues yesterday afternoon, but there was no outage, according to spokesperson Sarah Bulgatz. While there were delays in placing orders, Bulgatz said the online broker continued to handle trades. "There was a 10-fold increase in volume over a 20-minute period of time," she said. "The issues were widespread and not confined to Schwab."

TD AMERITRADE (Nasdaq: AMTD  ) : The broker did not experience any outages during yesterday's market turmoil, according to spokesperson Kim Hillyer. She said both of the company's online sites, Thinkorswim and its namesake TD AMERITRADE site, performed well. Hillyer said the company is investigating rumors that mark-to-market data centers could have affected trading.

Fidelity: Fidelity saw near-record peak brokerage transaction volumes on Thursday, according to spokesperson Vin Loporchio. The broker continued to serve customers, with some intermittent slowness for short periods, but without interruption throughout the day. "Customers were able to trade on and use the site throughout the day," he said. "Some trades that customers submitted during the day were executed, but may not have been immediately visible to customers."

Scottrade and E*TRADE Financial (Nasdaq: ETFC  ) : Spokespersons from Scottrade and E*Trade said that their respective brokers didn't experience any outages yesterday.

Did you experience any difficulties in accessing your online broker to trade? Weigh in below!

Fool contributor Jennifer Schonberger does not own shares of any of the companies mentioned in this article. You can follow her on Twitter. Charles Schwab is a Motley Fool Stock Advisor choice. The Motley Fool has a disclosure policy.

Read/Post Comments (11) | Recommend This Article (5)

Comments from our Foolish Readers

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  • Report this Comment On May 07, 2010, at 3:57 PM, djemonk wrote:

    Not sure how you'd know if Scottrade had an outage or if their website just crashed again.

  • Report this Comment On May 07, 2010, at 4:05 PM, XMFRael wrote:

    In my humble view, Schwab's comment is a bold-faced lie. I tired to buy VTI from about 2:30 until the close... as did a colleague of mine in New Orleans with the same results. At this point, my switching costs are high, otherwise I would switch!

  • Report this Comment On May 07, 2010, at 5:52 PM, Maui808Gal wrote:

    I use TDAmeritrade and just happen to be submitting an order when all hell broke loose. Wish I had hesitated a little bit...could have made a few screaming deals!

    One thing I realized yesterday...I DIDN'T PANIC! When I realized what was happening, my first thought was, WOW, what a great buying opportunity! My second thought was, I Wish I had more cash in my account!!

    Thank You Fools!! What could have been an emotionally and financially bad day,....wasn't. :)


  • Report this Comment On May 07, 2010, at 11:42 PM, ManchurianAnthro wrote:

    AMERITRADE made the grade. I had just logged in and was checking my positions right when the market plunged, and I knew it was time to buy. I was able to make a number of transactions (long value-type aquisitions) during the critical time period. Not even a hesitation on Ameritrade's part (several false starts on mine though), it all ran like clockwork.

  • Report this Comment On May 07, 2010, at 11:50 PM, ManchurianAnthro wrote:

    P.S. I will echo KahakaiBum, I wish I had had more funds available too! I did some buying on margin. It was something like 0800 in the morning out here when it happened - thank goodness I was on my second cup of coffee - I was burning up the keyboard!

  • Report this Comment On May 09, 2010, at 9:52 AM, hybridinvestor wrote:

    Greetings all,

    From a customer (me) of Fidelity for the last 7+ years, here's how Fidelity really faired when the crap hit the fan.

    (1) Web interface - Grade D-

    It became absolutely useless when all heck broke loose. It was so bogged down that it would either not update, take minutes to update, or update with an incomplete page. The only reason it did not get an F was because it did occassionally give an update and did not go down completely.

    (2) Fidelity ActiveTrader program - Grade A-

    As a customer that has access to their ActiveTrader platform (which does not mean one has to actually actively trade), I switched immediately to it when the web interface got bogged down and it was quite responsive. The only downside was that the real deals happened so fast (minutes) that by the time I wanted to buy things in ActiveTrader they had already rebounded. Next time, I will switch more quickly to AT but I typically just use the web interface for normal periods.

    So, all in all, the moral of this story is Fidelity (and likely most brokerages) are not prepared to allow their normal retail clients to be able to adequately respond (even positively with buys) during these times. I am sure the "big boys" program trading platforms worked very responsively during this period which just continues to show how much the playing field if not even close to level except anything over the very very long-term.

    One must truly remain contrarian over long periods of time IMHO to do well in this rigged market.


  • Report this Comment On May 09, 2010, at 2:48 PM, MADDYS1POP wrote:

    It's good to hear that there were no problems with Ameitrade. I had problems with them a couple of years ago & moved my account to Tradeking & I certainly did have problems with them the otherday. Just as I was trying to place an order, the platform "froze up" . It took a about 15 minutes for me to place my trade.

  • Report this Comment On May 09, 2010, at 9:12 PM, stockguru2014 wrote:

    All one has to do is look at the message boards online to see that Ameritrade is lying through their teeth. Also, Fidelity wasn't exactly being honest either. I still had trades from Thursday showing in my account as pending cancel even after the market close on Friday...

  • Report this Comment On May 10, 2010, at 1:39 AM, chaz572 wrote:

    FirsTrade was fully up and responsive. I was snapping between five different accounts on two different logins (mine and my Mother's, whose accounts I manage for her), watched five limit orders that had been placed earlier in the day/week go, found a benchwarmer stock in one account that miraculously hadn't dropped, sold it to free up capital, and bought a GG best buy in its place at a ridiculous discount, all before the rebound.

    Didn't see a bit of slowdown from FirsTrade's site; it performed as if nothing special were going on.

    I'd say that was fun; let's do it again, but I'm all out of cash and benchwarmer stocks I'd sell, so I'm not sure what I'd do if it did happen again other than grab a popcorn and watch the fireworks.

  • Report this Comment On May 10, 2010, at 4:28 AM, Tirelli wrote:

    how many billions were wiped out to sell on stop loss trades - just to recover 20 min later...been caught myself and lossed 25,000 - and not in the 60 % 'class' , which is a joke did they come up with 60 %???

    Believe that some people will try to cover up as long as they can...and why the heck does no one knows what happened... - it cannot be the result from a small country like Greece...common- what do they have: Tourism & Olives - Bollocks

  • Report this Comment On May 12, 2010, at 3:41 AM, Jerry2000000 wrote:

    Etrade had a definate lag during the onslot. My shorts sold but I was not able to adjust them, and I did not get results for an hour after, usualy within seconds for both.

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