Others however, advocate a more conservative approach. While he is an agreement with the objective of putting more investors in the driver's seat, Virtual Commerce Group's management was wary of the potential for abuses in the nascent online equities trading industry. Chairman Nik Mohamed Din called on government to draw up rules to prevent "any Tom, Dick or Harry" to set up similar online trading facilities. "We want only genuine people to provide such information and services on the Net," he said. The former KLSE chairman wants authorities to put the brakes on dubious independent investment advice Web sites sprouting up.
Daytrading mania elsewhere has resulted in several instances of "share ramping" as well as "punting and dumping," where "consultants" and investors deliberately offer misinformation in Web sites, forums and chat rooms to falsely inflate prices. A famous recent case was that of Yun Soo Oh Park, also known as "Tokyo Joe," who ran an investment advisory service Web site in New York, allegedly recommended stocks he was selling and received stocks in exchange for touting a company. Park, 50, charged members up to US$200 a month for access to a restricted area of his Web site and attracted 3,800 members.
The lure of quick money coupled with over-confidence from initial triumphs in rapid-fire daytrading may also lead some to financial ruin. An extreme case is that of money-losing daytrader Mark Barton who took 13 lives, including his own, on a killing spree at two Atlanta brokerage houses after losing more than a half million dollars in the stock market last July.
Such dire consequences hang like a dark cloud over the daytrading phenomenon. It serves as a sobering and cautionary tale. The hype surrounding online trading often obscures the importance of thoroughly understanding how markets work. Nevertheless, remissier Shim Choon Ming is more optimistic about the shifting tide towards online investing, which he sees as an eventuality. He believes that some investors will play a market while driven by greed while others will get burnt in the process but these will be a small minority of online participants.States Shim, "online trading is a real opportunity for remissiers to expand their clientele bases. Investors will soon realize there is a new medium of trading and will want to switch and I want to catch these new clients when they do." Shim believes the role of remissiers will change and that the industry will need to embrace the new technology or be left behind. "Our role will become more advisory and not just confined to keying-in orders. Salesmanship and value-added services will become more central. And more broking houses will be offering their picks and analyses on the net."
Cybertrading, like all internet-based products, is predicated on the belief that ease of technology will translate into cheaper, faster services with more choices and fewer middlemen. For both investors and brokers, online trading opens up many opportunities for making money and saving costs that never existed before. But the information highway is also an unforgiving place and the less lemming-like we are, the better the chance we will not end up as roadkill on Yellow Click Road.
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