I want to do some program trading.  Specifically, I want to (1)
download stock quotes in real time to my computer (an Excel
spreadsheet), (2) perform calculations in Excel, and (3) execute
trades in my on line brokerage account based on (2).

I know how to do (1) on a time delayed basis.  I already have a good
idea of the sorts of calculations I would like to perform.  But, I am
clueless about (3) -- How to actually execute trades to an online
brokerage account using data in Excel.  If I can get this to work at
least on a prototype basis using Excel, I would probably move to a
more robust programming language (APL, J).

So....Can this be done?  Am I crazy to try to do this?

I would like to know either if it can be done, or if I should forget
about even trying it.

Plus, the various risks involving trading delays, etc which might wipe
out an otherwise sound strategy.  I am aware that portfolio insurance
has recieved a very bad rap for it's failure to work in 1987, but this
was done on a large scale, institutional basis, and I am doing this on
a micro, personal scale.

Hi 42itous-ga,

Thanks for your question...I'm sure there are many people out there
who would love to get access to this type of tool if it was actually
reliable.

On a micro level, I think this is too ambitious a project to undertake
considering the risks and variables involved. I will provide you with
an outline of these to give you a better idea.

1. You are assuming full cooperation from the firm managing your
online brokerage account. This is absolutely not reasonable since the
slightest interface or functional change on their website would put
you at risk of being unable to perform trades when necessary, or even
worse, performing the wrong trades. If this were a commercial venture
I would consider it slightly more feasible since the brokerage firm
may want to get involved and perhaps get a piece of the pie in the
process.

2. There are major feasibility issues with getting this type of
program to work at all using Excel (I assume that by "using Excel" you
mean writing your program with Visual Basic). This is due to the
weaknesses in web-integrated features that VBA is burdened with. So
you would have to use a more robust programming language, as you say,
right off the bat.

3. You may run across security issue with the brokerage firm who may
somehow interpret the actions of the program to be fraudulant or
something to that extent. They may forbid you to use such tactics
since it does involve their trading system. They have every right to
cancel your account (or worse) if they don't approve of your doing
this type of thing.

4. The security of your program may be vulnerable - this would provide
a potential hacker to falsly execute trades using your account. You
would be held liable for these trades no doubt...

5. You mentioned trading delays; if you can overcome the rest of these
obstacles it would then be worthwhile to consider this factor. Since
there are a lot of things preventing you from executing the trade in
the first place, delays are not a factor at this point.

As you can probably tell, I suggest you rethink your idea a little
further. Why not perform (1) and (2) and then instead of (3), just
send yourself some sort of alert (sound or email) which will prompt
you to check a list of "suggested trades" and then you can carry them
out yourself in person? Just a thought..

Anyways, its nice to know that people are thinking of these sorts of
techniques...keep up the inventor's spirit!

If you have trouble understanding any of the above information please
post a clarification.

Cheers!

answerguru-ga

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Request for Answer Clarification by 42itous-ga on 17 Aug 2002 19:01 PDT

I am a little surprised that there isn't someone promoting personal
electronic trading, since it would generate a lot of commissions.

PC Quote offers an excel based
product...<http://www.pcquote.com/products/msexcel/index.php> with
more detailed description here
<http://www.pcquote.com/products/msexcel/directions.php>.

Your idea about manually executing the trades has some merit.  I had
anticipated adding a step where I had to personally OK the trades
before they were executed.

I wouldn't think that the security issue would be too difficult, since
all that is needed to execute an online trade is an account number and
a password.  I suppose that it would be possible to write some sort of
script to place the trade through the web site, but it would be
extremely clumsy.

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Request for Answer Clarification by 42itous-ga on 17 Aug 2002 19:15 PDT

Another thought would be to use something like 

<https://us.etrade.com/e/t/invest/apptemplate?gxml=at_pro_info.html>

The main problem with this (it appears) is that I need to route the
data through my own program, rather then use their various alerts,
etc.

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Clarification of Answer by answerguru-ga on 17 Aug 2002 20:34 PDT

Hi again,

It wasn't as much the security that I was concerned about, but moreso
the legal consequences you may be facing. The most important thing to
realize is that you are integrating whatever program/script that you
create with an entity that is owned by some other corporation. The
only way that this would be successful is if you have the
authorization of this company to go forward. Please do not take this
issue lightly...any problem that may occur will be placed on your
shoulders because they will have something to blame (even if it is
their fault).

I think we're a couple years away from program trading becoming a
viable commercial product...I guess you're just ahead of your time :)

Good luck in your quest,

answerguru-ga