Friday, March 06, 2015

Old posts made new: Multiple brokerage platforms

When market crashes, you thought that you can be nimble and sell your stocks if you’re in the wrong side of a trade. But have you encountered situations where your brokerage platform failed on you?


I looked through my 2007 posts and realized that I posted about it before. It’s found here:

1. The sky is falling
2. SPECIAL DAY – TAKE NOTE
3. DAMN U DBS
4. Finally logged on to DBS


Back then, I only had one brokerage platform which is under DBS Vickers online. It had failed miserably on me back then when I was trading warrants. In the midst of the trading, the whole platform went offline and I couldn't sell it. From a winning trade to a losing trade because of platform issues isn't funny. What’s worse is that warrants trading for HSI closes earlier, so it's nearing the closing time and I didn't want to hold on to a volatile warrant overnight.




Needless to say, it’s an incredible stressful time for me. I swear never again! That’s why I got another few backups as my brokerage platform. In fact, now I had several backups, even though I use mainly just one for my transactions. In the past, I used to log in all the time to trade. I seldom do that now, but I think it's still good to know that if I need to buy/sell, I had the options to go to different brokerage account to do it, just in case it fails on me again.


Again, the idea of redundancy applies. If you have a margin of safety on your stock purchases, do you also have a margin of safety for your transaction platform? Being prepared also means getting all your resources ready, for that moment when you need them the most, during the moments when you need them the least.


I think my thinking back then of having multiple brokerage platform, still applies to the context now, and possibly in the future.


15 comments :

Richard Ng said...

Ahhh... never thought of a contigency brokerage platform, I think I better go sign-up another platform too. ;-)

Singapore Man of Leisure said...

LP,

This post reminds me of the frequent MRT "disruptions".

With the dwindling of retail volumes, most new traders may not have experienced what we have experienced when the market is red hot.

It's times like these that we start to notice who are the "better" brokers (and not focus on which is the cheapest) ;)

Since I use a margin account, I can't use the other brokers option. So I make sure I have all the backup phone numbers in my mobile to talk to a real person as in a dealer.

Jimmy L said...

so did the brokerage coy get any fine from SGX? ;)

la papillion said...

Hi Richard,

You should. At least have one extra, wouldn't hurt since its free anyway. I didn't mention in my post, but I have extra platforms so that I can have a little bit more limit in buying and selling. When I started, my broker didn't give me a lot of limits. No problems now :)

la papillion said...

Hi SMOL,

You're right! Some platforms keep hanging when the volume shot up. Some are relatively more stable. And UOB pointed out the importance of having someone to call, and I don't mean a hot line. For all the brokerage firms I signed up, I actually know the brokers and their contact number. You really just need someone who can attend to you when shit happens.

People only look at transaction costs these days.

la papillion said...

Hi jimmy,

No lah, they didn't fine the firms Haha! I think part of the fault lies with themselves too! I rmb severely times that sgx itself also failed when volume shot up!

RetailTrader said...

Hi LP,

A timely post for me. I need to open accounts at a backup brokerage and have been procrastinating on that! Any intention to do a review of your current brokers in future?

RetailTrader said...

Hi LP,

A timely post for me. I need to open accounts at a backup brokerage and have been procrastinating on that! Any intention to do a review of your current brokers in future?

la papillion said...

Hi RT,

Haha, good reminder for you then :) I just heard this morning that standard chart brokerage platform was down the whole morning and nobody could access anything. What a coincidence :)

No lah, I won't do a review on the brokerage platform - all the brokers serving me are friends. But from my links provided in the article, you can tell which ones I deemed cannot make it. But bear in mind those are way back in 2007, so things might have changed already.

BfGf Money Blog said...

Hey LP,

Hahaha I never thought of a contingency platform before!

Good that you pointed this out!

la papillion said...

Hi bfgf,

Great for you! Go and check out some brokerage firms and sign up! Make sure you have a person to call and not just a hotline :)

Sillyinvestor said...

LP,
I had 2 platforms but not because of back up, but I think it now can serve as one. LOL, that back up even come CFD.

I experince that before. Can't remember it is China FibreT or whatever. Key in lower sell price, system hang, when refreshed, sell price is lower than my bid sell price. Tried again, it happened again!

What I did is call my broker, complain about the hanging and ask he to throw at whatever price he could. And he did in a minute. Think broker system is the one with most redundancies built in

la papillion said...

Hi SI,

Yes, having actual brokers is part of the redundancy. I was served by an anonymous broker in the past and if I had problems, I will have to call the hotline. But the problem is that the hotline is always too hot and much time and effort is spent just waiting to call someone.

Forget it! That's why all my brokerage platform have a person whom I can contact directly. When there's no shit, everyone looks at the cheapest transaction cost to determine which is the best brokerage platform to use. When shit happens, and you want to get shit done, you'll want someone to talk to and want a stable system.

Anonymous said...

Don't leave when the clock is about to strike 12. Leave at 11.45

la papillion said...

Hi anonymous,

I think the problem is that your clock might show 1145, but it might actually be 1215 or even 1300! You don't have a clue which is the correct time and this problem is compounded by the fact that different people show you their watch and it's all different time!