By Caitlin McCabe and Mischa Frankl-Duval
Customers of popular online brokerages struggled to trade from their accounts Monday, sidelining many investors who hoped to capitalize on an exuberant market rally that sent stocks soaring.
Companies across the investment landscape, from titans such as Charles Schwab Corp. to newcomers like Webull Financial LLC, said they had technical glitches as morning trading kicked off. Several of the platforms attributed the problems to extreme trading volumes and activity as investors rushed to buy and sell shares.
Among the companies that received reports of login issues or slowness were Vanguard Group, Charles Schwab, TD Ameritrade Holding Corp., Fidelity Investments and Webull. Even Discord, the messaging platform that many individual investors use to swap trading ideas, experienced a “brief disruption in service,” the company said.
The problems among trading platforms came as U.S. stocks zoomed higher, energized by news that a Covid-19 vaccine developed by partners Pfizer Inc. and BioNTech SE proved to be more than 90% effective in a pivotal study. Major U.S. stock indexes surged when markets opened, with the Dow Jones Industrial Average jumping more than 1,600 points at the opening bell before trimming its gains to close at its highest level since Feb. 20. Companies whose shares had been beaten down this year, including United Airlines Holdings Inc., Carnival Corp. and SL Green Realty Corp., all rallied 19% or more.
The stock-market jumps led to the highest level of volume during the first 30 minutes of trading since at least May 2019, the earliest data available, according to Dow Jones Market Data. During the 30-minute period, more than 3.7 billion shares of New York Stock Exchange- and Nasdaq-listed stocks changed hands.
Charles Schwab said some applications experienced technical issues, preventing some clients from being able to log in. Vanguard said some clients “may have experienced difficulty accessing their accounts.” TD Ameritrade said users were experiencing slowness and encountered trouble accessing its mobile app and platforms “due to heavy volumes of activity.”
Fidelity Investments said some users “may have experienced slower processing speeds for a short period at market open due to extremely high volumes” but said trades were processed and customers were able to access online systems.
Webull said all networks were experiencing slowness due to “extreme market volume and activity” in the morning. It said its quotes and trading engines are “fully operational” but warned that some traders might experience slowness when loading charts due to bandwidth capacity from its third-party content providers.
A spokesman for Robinhood Markets Inc., meanwhile, said that “despite historic traffic, Robinhood systems remained operational.” In anticipation of potential volatility, he added, the popular trading platform made some functionality within the app temporarily unavailable, and some users received warnings of high traffic. He said users were still able to place trades.
For some of the platforms, the technical difficulties were short-lived, with Vanguard, TD Ameritrade and Charles Schwab stating by late morning or early afternoon that issues had been resolved.
But for traders such as Shaun Hayes, a 38-year-old financial-services professional in Dallas who trades on TD Ameritrade’s thinkorswim app, the morning glitches were costly.
Mr. Hayes said that shortly after 8:30 a.m., the platform wouldn’t show him any stock data and he struggled to access his account. He had planned to buy put options on a broad S&P 500 exchange-traded fund, a trade that would give him the right — but not the obligation — to sell later at an agreed-upon price.
“I didn’t get to the point of actually trying to place a trade, because I had so little information available to me,” Mr. Hayes said. “It’s like being blindfolded.”
Ultimately, Mr. Hayes was able to make his trade about eight minutes after the market opened, but the problems he experienced accessing the platform meant he got a worse entry price than he would have otherwise. Mr. Hayes estimated that the delay cost him about $3,000.
“It’s real money that’s being left on the table,” he said.
Malik Brown, a 25-year-old student from Atlanta, also ran into problems trying to make trades soon after the market opened. It took him several attempts to log in to the Webull app, but his problems didn’t stop there.
“It gave me prices, but it wouldn’t allow me to buy any shares,” Mr. Brown said. “It was frustrating, of course.”
After about an hour of attempting to execute his trades on Webull, Mr. Brown turned to Robinhood, where he was able to buy his chosen stocks.
The technical glitches at companies across the trading landscape were reminiscent of this spring, when companies including Robinhood, Vanguard and Fidelity experienced outages as stocks swung wildly as Covid-19 cases rapidly spread. At the time, many of the companies said they were grappling with rapid surges in activity.
Online brokerages have seen record numbers of new customers this year as individual investors — many of whom are stuck at home due to the coronavirus pandemic — have flocked to the platforms to take advantage of commission-free trading.
Write to Caitlin McCabe at email@example.com and Mischa Frankl-Duval at Mischa.Frankl-Duval@wsj.com
(END) Dow Jones Newswires
November 09, 2020 18:27 ET (23:27 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.