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Online trading smooth
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August 5, 1998: 1:55 p.m. ET
Internet brokerages learn lessons from last October's Dow Jones sell-off
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NEW YORK (CNNfn) - Amid the delirium surrounding Tuesday's stock market sell-off, online brokerages remained calm.
Those companies apparently have learned the lessons from last October's sell-off, when the Dow Jones industrial average lost 554 points in one day. Back then, several brokerages experienced technical difficulties and incurred the wrath of frustrated investors who couldn't access their Web sites.
This time, however, online brokerages said they were up to the challenge, as several companies reported they had since implemented capacity safeguards to their systems in anticipation of the kind of frenzy that sent the Dow reeling 299.43 points Tuesday.
A CNNfn poll conducted Wednesday supported the reports from online brokerages. Only 20 percent of the more than 1,000 respondents who said they were trading via the Internet reported problems reaching their online brokers.
Joe Ricketts, chief executive officer of Ameritrade Inc., said Tuesday's trading volume was higher than normal, but about 30 percent lighter than its busiest day.
"We had more difficulty this morning," he said. "I think individual consumer investors saw more buying opportunities, so we had a little slowness on our site on the size of volume."
Ricketts added that Ameritrade has spent "millions of dollars" adding servers, access lines and backup systems to its Web facilities.
Denise Benou Stires, marketing director at DLJDirect, the online investing arm of Donaldson, Lufkin & Jenrette, said the company was "stacked to the gills" to handle Tuesday's 15-percent jump in volume. She noted that online traders also have a variety of means of accessing DLJDirect.
"We're on AOL, Prodigy and the Internet, and each is independent when it comes to handling capacity," Stires said.
Don Montanaro, president of SureTrade Inc., said although his site experienced a 60-percent increase in trades, that spike in usage had no ill effects on its system.
"We have measures to plan ahead for an increase our capacity," he said. "We're always ready for quadruple our normal capacity."
Elizabeth Winer, an E*Trade Group Inc. (EGRP) spokeswoman, said the company's volume was only slightly higher than its average trading day volume of 29,000. She also noted volume was considerably lower than last October's sell-off, when the site handled about 50,000 trades.
"We anticipated this last year by making improvements to our system," Winer said. 
-- by staff writer John Frederick Moore
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