- The Washington Times - Monday, May 29, 2000

Nearly 10 million Americans are trading stocks on line and that number will likely double by 2003, according to Forrester Research Inc.

Many of these on-line financiers are long-term investors building traditional portfolios. Increasingly, however, day traders are getting into the game using sophisticated technology to track stock market action.

Making split-second decisions is critical to day traders, but most are unable to initiate trades as quickly as the people trading on the floor.

To help day-traders keep up, D.C.-based Velocity Trade has developed FloorPass (www.floorpass.com). It is a private network linking day traders directly to trading floors of the Chicago Mercantile Exchange, Chicago Board of Trade and other world markets.

"Using the Internet, a trader's biggest obstacle is speed and reliability because once you log on you can get bounced around numerous times before you reach the broker in the pits," said Ira Kolmaister, chief technology officer for Velocity Trade. "This process can take seconds, during which time the prices are changing and money can be made or lost."

While FloorPass is marketed through a corporate Internet site, the connection between trader and the broker on the floor happens through a private, dedicated non-peering network of direct high-speed connections.

Traders can place orders or receive market data within 0.2 seconds using Data Broadcasting Corporation's eSignal (www.esignal.com), which delivers real-time streaming quotes and news direct to FloorPass terminals.

Velocity Trade's FloorPass joins an estimated 62 brokerage firms with 287 offices in the United States that can be identified as day-trading firms. This means they allow consumers to trade on their own accounts without professional advice.

FloorPass allows traders to buy and sell on all the leading index and financial markets including the S&P; 500, the S&P; E-mini, Dow Jones Index, Dow E-mini, Nasdaq, Nasdaq E-mini, major currencies, bond and several foreign markets.

"We believe that the equity market is for investment, not day trading, and that the Index markets are a better place for this type of trading," said Mark Yates, CEO of Velocity Trade. "Working within either market, the individual doing the trading is responsible for learning their craft, same as any other profession."

For a security deposit fee of $3,500, the firm provides computer equipment, including two flat-screen monitors and an Intel Pentium III processor. FloorPass, at no cost, also provides market charting and trade processing software, which it values at between $250 and $800 per month.

Velocity charges between $9.95 and $19.95 per trade.

The company also offers traders discounted access to the Mentor For Traders group, which teaches trading techniques and money management skills.

Velocity Trade warns day traders to be careful. As easy as it is to trade on line, it is also easy to lose money. Index traders should consider themselves a business enterprise and realize that knowledge, training and the right equipment are essential.

In an agreement with Westminster Brokerage LLC, Velocity Trade will police accounts to ensure that traders are acting responsibly. The company reserves the right to close an account that is being mishandled.

"Clients lose money, no way around it, someone will always make the wrong choice and the brokerage firm or service provider are never responsible for the profits or losses of any individual in business," Mr. Yates said.

"We can't promise profits, we can only deliver a great service. But we do not want to see our clients losing money."

Have an interesting site? Write to Joseph Szadkowski at the Business Browser, The Washington Times, 3600 New York Ave. NE, Washington, D.C. 20002; call 202/636-3016; or send e-mail to [email protected]

Site of the Week: Floorpass

Site address: www.floorpass.com

Recommended user group: Market day traders.

What's to Like? The FloorPass marketing site fits in nicely with the millions of electronic corporate brochures littering the cyber-highway while offering cleanly designed pages that are easy to navigate.

The front page image of a happy day trader, with puppy at his feet, gets across the point that he is blissfully working from home versus the muted background photo of traders on the floor, serious faces scowling, arms waving frantically in the air.

What's not to like? One of the advantages of putting a corporate brochure on line is the ability to provide an unlimited amount of information. Like a lot of news readers, stock investors and Internet surfers, I had numerous questions about day-trading stuff and hoped to find some answers at this site. Unfortunately, a stop at Velocity Trade's FloorPass did not do a very good job.

This site has been designed to sell a product to someone who already knows how to use it. Unfortunately, for the novice who thinks this might be fun, it makes it looks a little too simple, a little too easy and a little too free.

For visitors who take the time to read the FAQ, information can be found. But it would have been nice if Velocity Trade, Inc. would provide more of the expertise and insight into the business of day trading for the casual visitor.

Plenty of links to go around: Disappointingly, the site offers no links. It seems it would have been appropriate, at the least, to be able to link to the Web pages of its alliance partners. More so, it would have been very nice to link to information about day trading, such as the North American Security Administrators Association (www.nasaa.org) the governing body that polices traders on the Index markets.

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