Share dealing was a significant part of the motor of British economy throughout the 1980s. The Big Bang changed businesses' working practices and modem technology made it easier than ever before to access information about the state of the markets.
But the technology of the 1980s is looking pretty dated now. The state-of-the-art Reuters terminals, for instance, had a keyboard which could best be described as clunky and a monochrome display which bore a curious similarity to that of a popular brand of portable television.
Towards the turn of the decade, high technology brought coloured screens with more features and more information to the desks of dealers, but still with expensive cabling to the Reuters box in the basement. And for access to other information? There were modems on the desks of people who needed to access intelligence information, like the Financial Times Profile service, private links to the bank's mainframe computer systems, and a dedicated link to every computer system you needed.
The information may well have been at the fingertips of the people who needed it, but in many brokers' and bankers' offices it required terminals which could only be used for one service. This involved miles of cabling and was a nightmare for support teams.
With the need for so much specialised equipment to access market information, it's not surprising that share dealing remained the province of the specialists for so long - the appearance of share shops in local high streets was the only outward sign that more people were starting to play the markets.
If you want a direct connection to the Reuters share dealing service, you'll still find the only way is to install a connection to the Reuters network. But thankfully, there are now many other ways to find the information that you need, at rather more attractive prices.
Over the last couple of years, as Internet technology has become more widespread and systems such as NetScape's Secure Sockets have helped iron out security problems, there has been a tremendous growth in the information available to anyone who wants to keep up to date with the markets. So what's out there? Most of the information on the Internet is targeted at individual investors who want to keep track of the movements of their own portfolio. There are even services which allow you to buy and sell just by typing instructions into a form on your Web browser.
One of the best known of these is Electronic Share Information at www.esi.co.uk, which provides a range of services aimed at personal investors. For a monthly subscription, ESI's servers will let you track the movement of all the shares in your portfolio. For the casual share owner who doesn't do a lot of business, the Bronze service is relatively cheap - a subscription of #5 per month gets you 25 shares and 10 quotations. The #20 Silver service allows access to prices which are updated throughout the day.
Unlike brokers, those who like to play the market themselves find it easy to keep abreast of changes by using a service on the Internet. ESI will automatically mail subscribers when a particular share exceeds a certain price.
But what of buying and selling? As yet, there are few services which handle this. Those which do, like ESI's, don't have many brokers on their books yet but that's set to change. Thomas Carruthers, business development manager at ESI, anticipates more brokers will soon be using the service.
"We believe the best way to provide service is to make it easy for brokers to access the system," he says. As part of that, if ESI users won't have to pay an additional fee when you buy or sell shares. All the transactions are included in the monthly subscription so all you have to pay is the standard broker's fee, just as if you had walked into a high street shop.
"We'd like to open up the market, not close it down," says Carruthers.
Charging an additional commission for business carried out on the Web will slow down its acceptance.
While ESI is one of the best known companies which provides share information on the Web, there are many other sources of information for the investor.
Some of the most popular are the newspaper sites, including the Financial Times at www.ft.com and FT Information, which updates the indices of major world markets every half hour at www.info.ft.com/stocks/ . It may not be as accurate as you need it to be for power dealing, but for most people it's a handy indicator of what's been happening.
If you want more detailed information on a range of European markets but you don't need it to be as up to date as the FT indices, European Business News Interactive provides information such as the Frankfurt DAX or Paris CAC40 indices. It also includes summaries of the state of the market, including the five most traded shares and the five highest rises and lowest falls. When we checked the site, though, the information was more than four hours out of date.
For personal investors within the UK, the Infotrade site offers access to news and information about markets, but again, the pages available from the Internet aren't as up to date; in some cases the information can be a day old.
Where Infotrade scores, however, is in its approach. It is much more than just a Web site - it's a complete financial information system with dedicated software which you can run on your own PC to access information.
This includes regular downloads of share details which you can import into your spreadsheets, and access to dealing services. The service is unique in that it also provides access to the Internet, with two hours' access included in the #10 monthly fee; even if you already have access through another provider, it's worth considering as a backup service.
For those who aren't online but want good quality information, Infotrade may be a far better choice than a traditional Internet service provider.
Peter O'Connell, director and general manager of Infotrade, believes there are sound advantages to using a private network for the system.
"The downside of the Internet was unreliability, poor performance and security concerns in the consumer's eye," he explains. "We just wanted a platform that made the system consumer-friendly."
The service provides access to a range of brokers and, as with ESI, you'll pay no more than the standard commission rates when you decide to buy or sell. Everything, in fact, is designed to make it as simple as possible and to keep online time to a minimum by downloading information quickly. According to O'Connell, there are some good reasons why the service isn't on the Internet now but, he says: "We will be on the Internet when the issues are resolved."
You can bank on it
Most of the services currently available focus on personal finance and information which is designed to make it easier to make informed decisions.
However, Internet technology is not relegated to one end of the market - it's widely used by many of the major banks, and for more than just the Web sites which make up the public face of their business. While a Reuters feed is still the backbone of many share dealing systems, things have moved on from the old Reuters 2000 terminals which adorned City desks at the beginning of the 1980s.
In most City banks, Reuters information is supplied as a feed into a local area network, where PCs and Sun workstations running software such as Reuters ATW (Advanced Trading Workstation) can conduct the frantic business of buying and selling. Here, too, the impact of the latest technology is starting to be felt, as systems such as SettleNet come online. SettleNet is described by BT as a "community intranet" - it's a private network using Internet technologies which links banks in the heart of the City, enabling trading and direct information swapping between banks without using systems such as Reuters.
Web technologies are finding their way into trading rooms, too, thanks to the availablility of open standards for communicating between the workstations and information providers such as Reuters. Banks can now write their own applications in state-of-the-art languages such as Java, to provide features which aren't available from the standard trading software, augmenting the current systems which are based on a mixture of Unix and Windows computers.
In environments such as these, Java's portability is a strong point, allowing easy updates to all the computers at the same time. But it's not likely to threaten established working practices just yet. "I don't think that Java, or the Web in general, is mature enough to do well what ATW does," said one City computer expert.
And while Java may be powerful enough in the future to allow custom share dealing applications to be built, talking directly to dealing services like Reuters, it's unlikely to have a major impact on those who don't work in a dealing room. The technology may be up to the job but the information providers will have to look again at how they charge for their services before you can cut out the middleman.
For the foreseeable future, at least, if you want to buy and sell shares using your computer, you'll have to use one of the brokers available through ESI or Infotrade. As yet, however, there are only a handful, and while they may be sufficient for people who simply want to dispose of their gas shares or buy some more BT ones, it's unlikely to satisfy those who really want to do serious dealing - they are, after all, the people who are most likely to pay a monthly subscription to access a share service.
Both ESI and Infotrade, however, claim that by the time you read this article they will have more brokers online, which will provide more choice for those who are eager to play. Flexible online share dealing should be with us very soon.
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