eTrade 1999 Annual Report Download - page 4

1999, of 24x7x366 live agent customer service support; offering extended hours trading of Nasdaq and exchange-listed securities
through an agreement with Instinet; expanding global coverage by launching new sites in four additional countries (France, Sweden,
the UK, and Japan) to complement the Company's existing coverage in Australia, New Zealand and Canada; and, in August 1999, the
acquisition of TIR (Holdings) Limited ("TIR"). TIR is active in equity, fixed income, currency and derivatives markets in over 35
countries, and holds seats on multiple stock exchanges around the world.
The Company provides securities brokerage and related investment services. With the acquisition of TIR and due to the relatively
short history of the combined operations of E*TRADE and TIR, the Company has classified the operations of E*TRADE and TIR as
separate reportable segments, which is the way in which management currently evaluates their operating performance. Financial
information for the Company's reportable segments is presented in the consolidated financial statements. No material part of the
Company's consolidated revenue is received from a single customer or group of customers.
The Company was incorporated in California in 1982 and was reincorporated in Delaware in July 1996. The Company's principal
corporate offices are located at 4500 Bohannon Drive, Menlo Park, CA 94025.
Services and Products
The Company's services are based upon proprietary transaction-enabling technology and are designed to serve the needs of
self-directed investors. The Company's services include fully automated stock, option, fixed income and mutual fund order processing
and online investment portfolio tracking and financial market news and information. The Company offers its services to consumers
through a broad range of electronic gateways, including the Internet, touch-tone telephone (including interactive voice recognition) and
direct modem access. Customers have access to current account information regardless of which gateways they are using. The
Company expanded its services in many ways during fiscal 1999, including offering extended hours trading in both listed and
non-listed securities via an agreement with Instinet. The acquisition of TIR in August 1999, provides additional access to global
markets and institutions and is helping to accelerate the creation of the first global cross-border equity trading network for online
investors. For mutual fund customers, the Company introduced four new proprietary index funds that have received strong interest
from customers and has four new funds in registration.
The Company continually strives to increase the functionality of its services, as well as to offer new services that enhance customers'
online investing experiences. The Company's services give consumers increased control over their personal investments by providing a
link to the financial markets and to financial information through a customizable and personalizable user interface. The Company's
existing services and product offerings are described below.
Stock, Option, Fixed Income and Mutual Fund Trading
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 E*TRADE's automated order processing system. E*TRADE supports a range of order types, including
market orders, limit orders (good-till-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 listed
market orders (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
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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 trade. Account holders receive electronic notification of order
executions, printed trade confirmations and detailed statements. The Company also arranges for the transmittal of proxy, annual report
and tender offer materials to customers.
In November 1997, E*TRADE established a Mutual Fund Center (the "Center"), which now features more than 4,800 mutual funds,
over 1,000 of which are available without transaction fees or loads. The Center also offers several services free of charge, such as
Power Search, a state-of-the-art proprietary screening tool, and a wide spectrum of research, including risk measures, portfolio
information, historical charts, and online prospectuses. Mutual fund orders received by 4:00 p.m. Eastern time are purchased at the net
asset value of the fund as of the day of purchase. During fiscal 1999, the Company expanded its offering by launching four proprietary
mutual funds. In addition, four new funds are currently in registration, as the Company continues to expand its broad base of products
2002. EDGAR Online, Inc.