In a bid to capture a larger share of the every increasing world of online investing, CyBerCorp this week released its new CyBerX2 software for the active investor, while at the same time lowering its commission structure.
Philip Berber, chairman and founder of the Texas-based online brokerage, says the software is designed to provide direct access trading and intelligent order routing. Direct access allows a customer to trade with another customer, a market maker or specialist on the floor of an exchange, without having to go through a broker. Intelligent order routing means the order is automatically executed at the best price available. Berber explains, "The question is, at this moment, what is the best price that's available on any one of those ECNs, and, furthermore, at this moment, how does that compare with the best bid and offer that's available from 30 or 50 or 60 market makers for that particular stock?" CyBerX2, he contends, provides all that information to the investor in an easy-to-comprehend format.
CyBerCorp has also cut its commission fees 25% to 30% across the board. It was done "to increase our share of the very active trader market," adds Berber.
But the competition is still out there. Optimistically, Berber says CyBerCorp will have little trouble gaining customers from companies like E*Trade and Datek Online, because those services deal in less-sophisticated, first-generation technology-sending an e-mail to a broker, who then finds a counterparty for the trade. "Presumably, it is the market maker with whom he has a payment-for-order-flow agreement," charges Berber.
Berber says competition with companies limited to second-generation or direct-access technology like TradeScape and TradeCast is not a problem either. He says those systems still don't compare to the third-generation technology or intelligent order-routing capabilities of CyBerX2, which enables customers to automatically find the best price for any trade through any direct access venue. Additional features of the new software are advanced charting capability, options trading capability, stop-loss management and risk management.
One competitor that Berber doesn't mind going up against is Schwab and its Velocity trading software. That's because, if CyBerCorp loses a customer to Schwab, it hasn't really lost the customer at all. Schwab purchased CyBerCorp for about $488 million in February. "We feel that we have two complementary offerings. For the experienced and active investor, they'll probably chose CyBerX2, and for the less experienced and less active, they'll possibly chose Velocity."
CyberCorp requires $10,000 for an initial account opening, and the software, with real-time streaming data, is free. Level 2 data-according to Berber, that means, "seeing bids and offers from every market maker and every ECN within one display"-is free, if the customer does more than 50 trades a month. If they don't, the data is $79 per month. Berber adds that, for "the Jedi warrior, who is going toe to toe with the institutional professionals, then direct access, intelligent order routing and CyBerX2 are the way to go."