Review of CSFBdirect MarketSpeed and TD Waterhouse Select

Judging from the response to last week's comparison of Schwab's Velocity and Fidelity's PowerStreet Pro active trader platforms, a lot of this column's readers see themselves as active traders. Thanks to those of you who emailed me about these two services.

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This week we'll look at two more trading platforms: MarketSpeed, available from CSFBdirect (formerly known as DLJDirect) and Select from TD Waterhouse. Just like Velocity and PowerStreet Pro, both of these platforms originate from full-service brokerages that give customers lots of other services like bond trading and phone and wireless trading, in addition to online trading.

CSFBdirect MarketSpeed

The ungainly string of initials refers to Credit Suisse First Boston. The changeover from the more familiar DLJdirect resulted when Donaldson Lufkin & Jenrette was acquired by the multinational banking powerhouse. Let's just hope they don't merge with Morgan Stanley Dean Witter.

Names aside, one thing I like right away about CSFB's MarketSpeed is that you can download a working demo version from the broker's site even before you fill out an account application. With a cable modem, the download took me just a couple of minutes. From there, the program launches like any other new software you load.

You can't trade on the demo. But you can click through the different screens to see if the navigation is something you'll feel comfortable using several times each month or each week. Though some brokers show off their trading platforms with interactive tutorials, they're no substitute for poking around on your own.

What do you find when you poke around MarketSpeed? First, everything emanates from a single tightly organized window that takes up about a third of your desktop. That's a nice feature if you like to trade while chatting or surfing and you don't feel like shelling out for more than one monitor.

A series of tabs at the top of the screen lead to the four major areas within MarketSpeed: Markets, Brokerage, Quotes+, and Research. The Markets area gives a snapshot of what's up with the Nasdaq, the Dow and the S&P. The Research tab links you with TheStreet.com, Briefing.com and S&P Marketscope as well as proprietary reports from CSFB (available to high-end customers). The Brokerage tab takes you to an order entry screen. From there you can click to a streaming real-time portfolio, and an account balances screen that's one of the nicest I've seen. It clearly lays out your current assets and liabilities, the account's buying power and whatever funds might be due.

Hit the Quotes+ tab and you get a detailed quote, listing things like bid/ask, volume, the daily high-low and so forth. News headlines appear at the window's bottom. To your left are links that lead you to charts and Securities and Exchange Commission filings. There's even a link that lets you automatically call up the latest annual report.

If you think this layout isn't much different from what you'd find at other financial sites like Yahoo! Finance or Wall Street City, you're right. But you can't trade from those sites. Moreover, as I mentioned, MarketSpeed is a program you download; ergo, screens reside on your hard drive, which means they come up faster than they would from the Web.

TD Waterhouse Select

TD Waterhouse hasn't officially and fully debuted its Select platform yet. Certain customers are currently using it. All who are qualified should have access by the end of January, we were told. (Originally we were told mid-January.) Meanwhile, TheStreet.com was given a sneak peak.

Like CSFBdirect, Waterhouse Select tries to put as much information as possible into a single screen. The broker calls it an "Integrated Trading Cockpit." It's modeled after the trading platforms direct access brokers use. Your portfolio, your account status and an order-entry dialogue box all appear in the same window, so you can easily eyeball your account's vital signs. Click on any of the stocks within your portfolio and you bring up a detailed quote along with a chart and news. Watch lists with streaming real-time quotes and Level II quotes, showing the list of best bid and ask prices, are a click away from the trading cockpit. Also a click away is a feature that'll automatically spit out a consolidated Form 1099 detailing your trading activity for the IRS.

Unlike CSFB, TD Waterhouse Select downloads from the Web. I had trouble running the streaming real-time and Level II quotes. Problems included a couple of system freezes, some odd displays of machine code and warning prompts about ActiveX Controls, though I was told Select doesn't use these Java-like applets. Could have been my computer. Could have been my cable modem's network connection or my Internet security software. Bottom line: Be aware that this platform may not work behind a firewall, which you may find protecting the network at your workplace. You should still be able to log on and trade. But like me, you might have trouble getting streaming quotes.

The Price Tag

Technical problems aside, what does it take to qualify for Select? Execute 36 trades within the past calendar quarter and Waterhouse turns on the streaming quotes and the "cockpit." You also get a lowered commission rate of $9.95 on market orders (down from $12). There's a higher level of features called Select Plus, where Level II quotes kick in, along with scrolling news, some advanced charting features and options data. To qualify for Select Plus you must make 72 trades each calendar quarter.

Compare that to CSFBdirect, where any account holder can access the great majority of the MarketSpeed's features. CSFBdirect's base rate commission is $20 for market or limit orders. However, streaming Level I quotes cost $25 a month (unless your account totals $1 million). That's a lot when you consider rival brokerage Datek is among the sites on the Web that gives Level I quotes away, even to nonaccount holders.

My Assessment

I liked CSFB's neatly organized, single-window approach to trading. My major gripe -- in addition to the cost of Level I quotes -- is that you can't view those Level I quotes at the same time you enter an order. Waterhouse's Select Pro solves that problem. Because Waterhouse Select gives you Level II quotes it might seem like it's better geared to active traders, but I don't think it's worth making 72 trades a quarter (288 trades per year) just to access Level II quotes, as Waterhouse requires.

If I traded that frequently, I'd want the ability to preference (that is, direct) orders to a particular ECN or market maker myself, something neither of these platforms allows. TD Waterhouse says it plans to introduce direct-access trading later this year. Without the ability to preference orders, Level II quotes can be a dangerous distraction. You might get price data quickly, but you won't be able to direct your trades as quickly as a lot of other people out there.

So who should use MarketSpeed and Select? If you like having ready access to proprietary research and other fundamental data within your trading platform, then CSFB's a worthy choice. Waterhouse's automated 1099 forms could save you several hours with your accountant at $75-plus per. Or maybe you simply like the reputation or the handholding that comes with either of these brokerages. Fine. Just be aware, there are faster, cheaper and maybe better platforms out there.

The Survey Continues

Please email me about your experiences with CSFBdirect's MarketSpeed and TDWaterhouse's Select as well as some of the other active trader offerings of brokers we'll be reviewing in the future, namely, Datek, Interactive Brokers and Power E*Trade. Several of you suggested other brokers we should look at; I'll try to work those in as well. Your comments result from months or years of experience you've had with these brokers, and as such they can be of enormous help to other active traders. Once we finish this series, I'll run one or two columns with the points raised by your letters.

If you do write, please tell us if we may use your name with your comments or if you want to remain anonymous. Also, please indicate if there are certain parts of your emails -- expletives, confessions, details of large account balances, for example -- you want kept private. I'll certainly respect your wishes.