ONLINE TRADING FINALLY COMES OF AGE

By NOAH ROBISCHON

As the sun rose on Omaha, Neb., last Tuesday morning, 42 traders confabbed on the floor of the brokerage firm Ameritrade, ready for battle. By the end of that grueling day, the top broker had executed a heroic 442 trades. Nice work, but nothing compared with the action in the next room. There, a rack of workstations had calmly processed 3,600 orders, all placed over the Internet. And that was in the first hour of trading.

Imagine the frenzy at Charles Schwab & Co., the nation's largest online brokerage house, as it attempted to handle the siege of 1.5 million customer inquiries--three times its normal volume. Or at the boutique E-shop Datek, which handled more than 20,000 transactions, double its usual load. Similar scenes were played out in a dozen online brokerages across the country as Net users took to their computers to buy and sell stock. Whatever else the "Correction of '97" signifies, it will surely be remembered for finally sanctifying online money managing.

Which isn't to say that everything went smoothly. To hear many Net investors tell it, personal-computer transactions were more of a drag than a click. Although investors were far more likely to get through to a computer than to a human broker, electronic shops such as Schwab, E*Trade and Waterhouse bogged down when the calls swelled to double the normal traffic. Although Monday's traffic jams may have saved a few investors from selling too fast, Schwab spokesman Tom Taggart conceded that there were "no excuses" for the delays.

But by the end of Tuesday, hundreds of thousands of online traders did get through--and they swore by the experience. Slow trading was better than no trading for online investors who were maneuvering their funds minute by minute as they followed the market's jagged path. Such intimate control over funds is one reason investors are flocking to the digital trading floor. Offline brokers charge higher commissions, "and you can't really see what they're doing," says software engineer Steve Salgo, 40, whose balance was instantly updated on his computer--no waiting for a close-of-market tally. "I could see what my positions were and the status of my order without staying on the phone."

For still other Web users, access to good, timely information was even more important than transactions. At Quote.com real-time charts graphically update portfolios throughout the day, and investors can even create "watch lists," or mock portfolios, that monitor alternative investment options. These tools would normally sit on a broker's desk but are now accessible to anyone. "The playing field is slowly starting to be leveled," says Chris Hill, spokesman for the popular Motley Fools, an online investment-advisory forum. "More and more, the individual investor has the tools available at his or her fingertips to compete with the traders on Wall Street." The trend will surely increase--but preferably under less stressful conditions.

--By Noah Robischon