Ameritrade hit with service snafu
The Web trading operation was working "startlingly" well, Ricketts said in an interview on CNBC. On Wednesday, however, comes word that it wasn't exactly so. Instead, Ameritrade, the Web's sixth-largest brokerage, has been suffering from service problems in the past two heavy trading days, company president Joe Konen acknowledged to MSNBC. Specifically, Konen said that Ameritrade was experiencing delays in updating portfolio positions for all of its Web customers. And callers to telephone lines for customer service and technical support were experiencing delays getting in touch with customer service representatives.
Konen maintained that customers were able to enter trades without a hitch. Indeed, he said that in the past two days, the Omaha, Neb.-based Web brokerage has handled a record of more than 65,000 trade orders.
But several surfers maintained, in scores of e-mails to CNBC and posts to Internet discussion areas, that service problems at Ameritrade had made it difficult to enter trade orders, or to determine their portfolio positions before trading. Those complaints pose a customer service issue for publicly held Ameritrade, and also highlight a risk for users of online brokers. It can be chancy to rely on a Web site for time-sensitive trading. Yet retail day-traders represent an active and growing customer base for Web brokers such as Ameritrade.
"I have tried to log into my account 311 times ... I keep a log," one CNBC viewer wrote in an e-mail to the cable television network.
"The telephone line is busy. I cannot log into my account. I am very frustrated," the viewer added.
Silly coding issue
Konen said that the portfolio update problem was related to heavy trading volumes, and "a silly coding issue," upon which he was not immediately able to elaborate.
The problems kept Ameritrade from putting its computers through their normal overnight procedure of updating accounts with positions as of the close of the previous trading day. As a result, on Wednesday, accounts were showing positions as of Monday, and on Tuesday, they were showing positions as of Friday, Konen said.
He added that the problem will be fixed by Thursday. Konen also noted that, in the interim, customers can call into customer service or technical support lines to obtain portfolio positions. Furthermore, the brokerage continues to offer updated records of completed trades on its Web site.
But Konen acknowledged that the surge of calling volumes had created delays for callers into the customer service and technical support lines, who are put into a queue until an agent is available. Konen insisted that every other feature of the site was working fine.
That's different from the description Ricketts gave on CNBC Tuesday. When asked how the brokerage was handling record trading volumes of more than two-times normal traffic, Ricketts said: "It really is quite startling for us to see trades jump that much and have everything work that smoothly."
That comment prompted a surge of complaints to CNBC and on the Internet.
"I thought perhaps I was watching Clinton during your recent interview with the president of Ameritrade," another CNBC viewer wrote. "Yesterday might have been fine for him, but his system crashed and ... the phones were busy."
Slow moving sites
To be sure, data transmission and computer problems can afflict any Web trader, and be entirely unrelated to a brokers' Web site; delays can occur at any Internet hub. But inquiries by researcher Gomez Advisors indicated that Ameritrade's Web site was suffering from the slowest page loading time of all leading Web brokers over the three busy trading days leading up to Tuesday's record. Gomez consultant Alex Stein said that the firm found that Ameritrade's log-in pages were taking as long as 13 seconds to load over a high-speed, dedicated Internet connection. No other top broker was taking more than 10 seconds, Stein added. Another Gomez consultant said that Ameritrade was similarly slow on Tuesday.
Stein said that when Web pages take longer than 10 seconds to load, they can time out - or surfers can become frustrated, and begin pressing the refresh button, compounding the problem. Furthermore, page load times can be substantially longer for surfers using dial-up modems, which transmit data much slower than dedicated Internet connections.
Gomez found that other top brokerages had much faster page-loading times, with Charles Schwab, the largest Web broker, for instance, loading pages in 2.5 seconds or less. E*Trade, the second largest Web broker, had a worst-case page download time of 9.5 seconds.
Online brokers were generally reporting trading volumes Monday and Tuesday that were at or near records. That was consistent with the broad markets: The New York Stock Exchange Tuesday reported record volume of 1.205 billion shares, topping its Oct. 28, 1997, record of 1.201 billion shares. Volume on Wednesday was also heavy, exceeding 895 million shares just before the market close.