t's here! Fidelity Brokerage
has thrown the switch on its much-talked-about basket trading system. The new service, which was originally targeted for a June debut, is designed to allow individual's to trade individual securities in a basket that mimics a mutual fund's diversification. It may also take the wind from the sails of startups such as Foliofn
Fidelity is not the only heavy-weight entering this market. Charles Schwab
had been testing a similar service with a number of its clients in a pilot program in the Washington DC area. That pilot has ended, according to a Schwab spokesperson, and the results are being evaluated. "We are still looking at the results and have made no decisions either way," said the spokesperson.
The Fidelity program will allow investors to construct baskets of anywhere from five to 50 securities as long as they make a minimum investment of $10,000. Investors will be able to track the basket and trade in it in real-time throughout the trading day. The firm plans to offer predefined baskets at a later date.
Customers also have the ability to enter multiple orders at the same time and can assign specific share tax lots after the orders are processed, said Fidelity in a description of the service.
"Our new basket offering is a sophisticated trading tool that allows our customers, particularly our more active and involved investors, to personalize their portfolios and gain more control over their holdings," said Paul Graham
, senior vice president, Fidelity Online Brokerage.
For all of the hoopla surrounding baskets, there is still some question as to whether the product is a niche one or one that presents a genuine long-term threat to registered mutual funds.
Foliofn, for one, refuses to share data on how many accounts it maintains, but from all appearances it has failed to take the world by storm. The Vienna, Virginia-based firm has pulled back aggressively marketing its service to individual investors in recent months. Instead, it is pushing its platform as tool for other investment managers and fund managers to use.
E*Trade Weaves Baskets with S&P, 06-05-2001
Basket Trader to Reveal New Talents, 03-29-2001
Basket Trading Rumors, 02-23-2001
Basket Trading Rumble, 02-20-2001
Where's the Beef?, 02-16-2001
Decisions, Decisions, 01-12-2001
FOLIOfn Raises $15 Million, 07-05-2000
Stay ahead of the news ... Sign up for our email alerts now