P1: C-167
Flicker WL040/Bidgoli-Vol III-Ch-23 September 15, 2003 15:3 Char Count= 0
282 SECURITIESTRADING ON THEINTERNETbrokerages hit hardest. Newly insecure investors felt the
need for reliable advice. Owing to shaky financials and an
increased requirement to offer added value, the e-finance
web has consolidated. There have been shakeouts, merg-
ers, and alliances among the online discount and full-
service brokerages and ECNs, providing new financial
strength and access to research, recommendations, and
tools that discounters had not offered in the past. Market-
ing strategies are evolving from a strictly low-price basis
to one of convenience and personalization that leverages
the nonprice strengths of the Internet.
Successful e-finance business models to date and into
the future exploit multiplicity. Three business models
promise a thriving potential:Multichannel model (“clicks and mortar”): Charles
Schwab successfully defended its premier industry po-
sition against online start-ups by offering its customers
a variety of access points that let clients use whatever
communications methods, in any combination, they
chose: branch offices, telephone, e-mail, World Wide
Web, and postal mail.
Multiproduct model: Financial services firms have found
it far more attractive to customers, and less expen-
sive for the firm, to offer existing clients products that
span the investment, banking, and insurance indus-
tries. “Account aggregation” become the buzz phrase
of 2001 as companies strove for greater “share-of-
wallet” rather than more “share-of-market.” E*Trade,
for example, moved into the banking arena several
years ago by acquiring an online bank and then es-
tablished a physical footprint by buying into an ATM
network.
Multiple technologies:Investors’ desire for multiple touch
points includes the expectation of timely information
flow wherever they happen to be. Wireless reception
devices—from Web-enabled cell phones to Internet-
enabled PDAs (personal data assistants, hand-held
computing devices)—have proliferated and become
necessary accessories. Financial data are one of the
services most in demand by wireless users, as seen
from the list of top 10 channels in AvantGo’s mobile
network (Table 4).Wall Street’s web of online securities trading has been
built strong but flexible. Its shape is evident, but it is
equally evident that new strands are being added con-
stantly, creating a richer and more complex net for the
future. Charlotte’s children may still need to struggle, but
they are building an infrastructure that will last.Life is always a rich and steady time when you
are waiting for something to happen or to hatch.
(Charlotte’s Web, p. 176)GLOSSARY
Sources: McFarlan and Tempest (1999); Glew, Schwartz,
Palumbo, Lotke, M., and Lal (1996); http://www.morganst
anleyindividual.com/customerservice/dictionary/default.
asp (2002); and http://www. contingencyanalysis.com/
glossaryamericanoption.htm (2002).
Abnormal returns If an investment yield return on in-
vestment higher (or lower) than would be predicted
by an efficient market model, it is said to have earned
“abnormal” returns.
Bear market A bear market is sometimes described as a
period of falling securities prices and sometimes, more
specifically, as the point at which prices have fallen 20%
or more from a high.
Bid and ask Bid and ask is better known as a quotation
or quote. Bid is the price a market maker or broker
offers to pay for a security, and ask is the price at which
a market maker or dealer offers to sell. The difference
between the two prices is called the bid–ask spread, or
simply the spread.
Bond Bonds are debt securities issued by corporations
and governments. Because most bonds pay interest on
a regular basis, they are also described as fixed-income
investments.
Bull market A prolonged period when stock prices as
a whole are moving upward is called a bull market,
although the rate at which those increases occur can
vary widely from bull market to bull market. So can
the length of time a bull market lasts.
Chat room This rather generic term has come to
describe one of the more popular activities on theTable 4Top AvantGo [Wireless] Channels, Based on Units of Downloads at
Advantgo.com, October 2002Overall Top 10 Top 10 Business/Finance
1 USATODAY.com CNETnews.com
2 CNETnews.com The Wall Street Journal
3 Espedia To Go Yahoo!
4 The Wall Street Journal CNNmoney
5 New York Times Bloomberg
6 The Weather Channel Business Week Online Handheld Edition
7 Yahoo! Fool.com—Quotes and News (formerly Motley Fool)
8 CNN FT.com
9 MSNBC.com Headlines Zdnet to Go
10 CNN/Sports Illustrated Economist.com Mobile EditionSource: https://my.avantgo.com/browse/, retrieved October 24, 2002.