eTrade 2000 Annual Report Download - page 6

Customers can directly place orders to buy and sell NASDAQ and exchange-listed securities, as well as equity and index options,
bonds and mutual funds through our automated order processing system. In fiscal 2000, we extended our trading window to include
the hours from 8:00am-6:30pm Eastern Standard Time (“EST”), supporting trading for an additional 4 hours outside the regular
market window. We support a range of order types, including market orders, limit orders (good-until-canceled or day), stop orders and
short sales. System intelligence automatically checks the parameters of an order, together with the customer’ s available cash balance
and positions held, prior to executing an order. All market orders for exchange-listed securities (subject to certain size limitations) are
executed at the National Best Bid/Offer (‘‘NBBO’ ’ ) or better, at the time of receipt by the third market firm or exchange. The NBBO
is a dynamically updated representation of the combined highest bid and lowest offer quoted across all United States stock exchanges
and market makers registered in a specific stock. Eligible orders are exposed to the marketplace for possible price improvement, but in
no case are orders executed at a price inferior to the NBBO. Limit orders are executed based on an indicated price and time priority.
All NASDAQ market orders, subject to certain size limitations, are executed at the Best Bid/Offer, Inside Market or better at the time
of receipt by the market-maker. All transaction and portfolio records are automatically updated to reflect trading activity. Buy and sell
orders placed when the markets are closed are automatically submitted prior to the next day’ s market opening unless the customer
chose to enter the order as an extended-hours transaction. Account holders receive electronic notification of order executions, printed
transaction confirmations and detailed statements. We also arrange for the transmittal of proxy, annual report and tender offer
materials to customers.
Market Data and Financial Information
We continuously receive a direct feed of detailed quote data, market information and news. Customers can create their own personal
lists of stocks and options for quick access to current trading information. We provide our customers and members free real-time price
quotes, including stocks, options, major market indices, most active issues, and largest gainers and losers for the major exchanges.
Users are alerted when a stock hits the price, volume or price to earnings ratio that they set. Through our alliances, we also provide
access to breaking news, charts, market commentary and analysis and company financial information from over a dozen branded
partners. As with after-hours trading, customers can access extended hours quotes, get breaking market news, and place orders. This
service is made available via our relationship with the Archipelago Electronic Communications Network.
Portfolio Tracking and Records Management
Customers have online access to a listing of all their portfolio assets held by us, including data on the date of purchase, cost basis,
current price and current market value. The system automatically calculates unrealized profits and losses for each asset held. Detailed
account balance and transaction information includes cash and money market fund balances, buying power, net market portfolio value,
dividends received, interest earned, deposits and withdrawals. Brokerage history includes all orders, executions, changes and
cancellations. Tax records include total short-term or long-term gain/loss and commissions paid. Customers and registered members
can also create watch lists to include most financial instruments a customer is interested in tracking—for example, assets held at
another brokerage firm. These watch lists can include stocks, options, bonds and many mutual funds. In fiscal 2000, we introduced
Online Documents, an optional service that allows customers to receive and view official account statements and transaction
confirmations via the Internet, providing added convenience.
Cash Management Services
Fiscal 2000 marked the introduction of E*TRADE Account Express, a service that allows customers to open and fund new brokerage
accounts in real-time via the Internet, streamlining the application process and minimizing paperwork for qualified customers. We
continue to receive customer payments through the mail, federal wire system
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or the Internet, and credit these funds to customer accounts upon receipt. We also provide other cash management services to our
customers. For example, uninvested funds earn interest in a credit interest program or can be invested in one of nine money market
mutual funds. In addition, we provide free checking services with no minimum balance requirement through a commercial bank and
are exploring the expansion of these services. We also offer electronic funds transfer via the Internet and an automatic deposit program
to allow scheduled periodic transfers of funds into customers’ E*TRADE accounts.
Other Services
Fiscal 2000 marked significant progress in our quest for a leadership presence in wireless finance. Through alliances with AT&T
Wireless, Sprint PCS, Verizon Wireless, Nextel Communications, OmniSky and OracleMobile, we are furthering our wireless strategy
2002. EDGAR Online, Inc.