Stock Market 2.0

2007/07/08 · by · in Economics, Ideas, Punditry

I was reading Andreessen’s thoughts about Web 2.0 and had a nice thought myself: Wall Street is behind. They have giant festering piles of business and financial logic, and are falling behind on the internet front. What is needed is an internet trading company that can provide free quotes (with better than 20min delay) and insanely low commission rates (because everything’s automated). A company that specializes in accepting trades over the internet through an open API. A company that disdains to doing thigs the old fashioned way. A company that is fully zen with the here and now of the marketplace of ideas.

Even better would be if they acted as a front end to foreign exchanges, thus giving the little guy (ubergeek math heavyweight with a rack of machine at home and algorithms coming out the wazoo) a convenient way to non-stop day trade by transparently moving the trades among the markets. ( Sony is traded on American, European, and Japanese exchanges, so why not trade 24hrs/day? )

A nice Web 2.0 interface would be the main attraction though, and the toughest to get right. People have been trading stocks for a very long time, and everyone does something different in their analysis. The AJAX stock plotting, and automatic signal generation shouldn’t be a stepping stone for the open API, it should in fact replace it. It’s time that we had a web-site that could be user-programmable. And I don’t mean dropping in widgets, I mean full-on IDE.

As a start though, figure out what the majority of traders need, and how best to represent that in GUI, and work from there, providing the trading API so nobody gets left out while the fundamental user-interface research gets done live, the instant-feedback Web 2.0 way.

Also, free registration for a ‘paper’ account, so that users can back-test and familiarize themselves with trading before actually plunking down hard-earned wealth. The free account should do everything except actually trade on the exchanges. It shouldn’t be crippled in any other way.

GStock is wonderful, but they don’t go far enough.