Best Online Trading Web Sites

Trading online is one of the most popular Internet activities. It is clear that online trading Web sites have a strong financial future -- if they can only survive the heated battle for customers. Let's take a look at which sites are doing the best job of gaining and retaining online customers.

Rather than waste time reviewing numerous online trading rankings, let's go straight to the source of most Internet data: Jupiter Media Metrix. Fortunately, Jupiter has studied online trading sites thoroughly.

Size Matters

A Web site's audience is best measured by unique visitors (visitors are a combination of current customers and potential customers). The site with the biggest audience has the best shot at the biggest market share. Jupiter calls this measurement their UV Index. The top 5 UV Index performers are:

Rank | Web Site | UV Index

1) ShareBuilder.com 100

2) Fidelity.com 84

3) E*Trade.com 70

4) Ameritrade.com 51

5) Schwab.com 38

Time Will Tell

The amount of time a user spends on a Web site is a good measurement of how much they like the site. Online satisfaction is important in retaining customers. Jupiter produces a statistic called the "Intensity Index" which ranks sites according to the number of minutes a visitor spends on the site per day. The top 5 Intensity Index sites are:

Rank | Web Site | Intensity Index

1) TDWaterhouse.com 100

2) PutnumInvestments.com 41

3) AmericanCentury.com 26

4) Ameritrade.com 23

5) ML.com 22

Repeat After Me

Repeat visitors and customers are important in online trading survival. The more people often people visit, the more often the site has a chance to make money. Jupiter calls this measurement "frequency." The Frequency Index is a measures the number of days per month a user visits the site. The top 5 Frequency Index sites are:

Rank | Web Site | Frequency Index

1) E*Trade.com 100

2) BuyandHold.com 41

3) TDWaterhouse.com 26

4) CSFBDirect.com 23

5) Schwab.com 22

Where are your loyalties?

It is not desirable for your customers to be frequenting your competitors sites. Jupiter measures a site's customer loyalty by gathering data about how many secure visits the user makes on other financial sites. This measurement is the only negative measurement Jupiter uses. The less negative the number the better. Here are the top 5 Loyalty Index sites:

Rank | Web Site | Loyalty Index

1) ML.com 0

2) ShareBuilder.com -16

3) CSFBDirect.com -20

4) EdwardJones.com -21

5) AmericanFunds.com -23

The Best Online Trading Sites

Now that we know the best sites according to specific measurement's above, the question is: Which sites are the best overall? After taking all the factors into account and applying weight to the portion that Jupiter Media Metrix deems the most important, the following "Core" rankings are made:

Top Online Trading Web Sites

1) E*Trade Financial Network

2) TDWaterhouse.com

3) ShareBuilder.com

4) Fidelity.com

5) Ameritrade.com

6) Schwab.com

7) Datek.com

8) ML.com

9) CSFBDirect.com

10) Vanguard.com

11) Americanfunds.com

12) BuyandHold.com

13) EdwardJones.com

14) AmericanCentury.com

15) PutnamInvestments.com

16) Prudential.com

17) PruFN.com

18) TRowePrice.com

19) Janus.com

20) Scottrade.com

In Summary

Although these measurements are believed to be accurate, I would like to point out that there is a mix of different kinds of companies in the list. For example, it may not be fair to compare Vanguard with ShareBuilder.com. One is a mutual fund company and the other is a broker for non-mutual funds.

What does the data mean? It is hard to say. You could use the data to pick your future broker, but the measurements might not be geared to what you look for in a trading firm. You could use the data to determine which online trading firm has the brightest future, but there are many other factors in running a profitable company.

Regardless of how you decide to use the data, things can change quickly. For example, Ameritrade recently purchased Datek.com giving it a legitimate shot at being the top online discount broker. Fidelity may have better tools on their site than Janus, but that could all change tomorrow. I do commend Jupiter on their hard work in determining the best in the online trading world.

Data Source: Media Metrix, 1/02 (US Only), Jupiter Analysis. Businesses interested in Jupiter's services should visit jmm.com.