Online Trading In 2018: Brokerage Execs Talk Mobile Apps, Cryptocurrency And Regulation

Brokerage expert Theresa Carey took the temperature of top executives from the sector at the 2018 Benzinga Global Fintech Awards on emerging trends in a sector that’s rapidly shifting to mobile platforms and intersecting with new instruments such as cryptocurrencies.

European Data Rules Kick In 

The European Union’s General Data Protection Regulation takes effect May 25, and Steve Sanders, the executive vice president of marketing and product development at Interactive Brokers IBKR, described it as the “bane of my existence.” Compliance with the regulations is taking resources from other products at the online brokerage, he said.

A similar legislation of data privacy is likely in the U.S., but might be “not as harsh,” Sanders told Carey during the panel discussion.

“Personally, I think everyone should just have an opt-out [or] unsubscribe at the end of the email.”

Differing Cryptocurrency Approaches

After CBOE Global Markets Inc CBOE launched bitcoin futures in December, Charles Schwab Corporation SCHW didn't immediately make the product available to clients, said Barry Metzger, the brokerage’s senior vice president of global, trading and advice.

That's in contrast to fellow panelists TD Ameritrade AMTD and Interactive Brokers, both of which made bitcoin futures available as soon as they went live.

Schwab tests the liquidity and volatility of new issues before releasing them to clients, Metzger said.

“We want to make sure clients aren’t going to blow themselves up.”

Some of the “sizzle” of cryptocurrencies has come and gone, Metzger said, noting that Schwab will take the same measured approach with new products in the future.

Mobile Apps: A Fundamental Change In Trading

TD Ameritrade clients have quickly adopted mobile trading, with 40 percent of clients logging in daily on a mobile platform, said Steve Quirk, the executive vice president of the brokerage’s trading group.

Mobile trading has led to a “smoothing out” of trading volume, Quirk said: rather than almost all trading taking place at the market open and close, clients are interacting with the market throughout the day as news develops.

“It’s critical here,” Quirk said of the U.S. market. “In Asia, it’s amazing. They don’t even build anything on a web-based browser anymore.”

Roboadvising And Brokerages

TradeStation has had automated trading capabilities since the company was founded in 2001, said President John Bartleman.

A quant team is developing models for the company for a “hedge fund-type system” with artificial intelligence and machine learning technology, he said.

Quirk said the use of roboadvising technology is “less about the robo in and of itself” and more pertinent due to the way the technology will seep into other trader transactions.

Interactive Brokers purchased the company Covestor and has adopted robo technology for its adviser clientele, Sanders said.

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Panel moderator Theresa Carey, left, with Charles Schwab's Barry Metzger, TD Ameritrade's Steve Quirk, Interactive Brokers' Steve Sanders and TradeStation President John Bartleman at the Benzinga Global Fintech Awards May 16, 2018 in New York City. Photo by Mandar Parab.