| 01 February 2010

TradeMONSTER was in our little neck of the woods last weekend -- San Francisco -- with their Invest Like a Monster event. We had the pleasure to sit down with the team and to listen to a few of the talks from the optionMONSTER fellas. Guy Adami was his usual refreshingly honest self and Jon Najarian was so wrapped up in a particular trade example that it practically took a cane to yank him from the stage.

What impressed us most was the audience. They were an active group of investors that displayed a particular sense of savvy we aren't used to seeing at such investor events. For example, Mr. Adami was peppered with questions about the economy, including some particular digging-in on comments and actions from Paul Volcker, which led him into a brief talk about the current state of political rhetoric and the effect it's bound to have on investor. The crowd ate it up.

TradeMONSTER is the new kid on the block and we know that their marketing budget is slim. Yet they've been able to aggregate a high-quality group of active investors that is building momentum. The approach is simple, but effective. Build a product that really works for investors and investors will find you.

Companies like optionsXpress (OXPS) and TD Ameritrade's thinkorswim (AMTD) built their businesses on the highly specialized task of derivatives trading. And as new accounts thinned they manufactured customers by educating novice investors, teaching them how to straddle and strangle. Their tools are not bad, but they've been consistently bolted and bandaged and layered so much that an education is almost a required step before you can really tackle the tool.

Furthermore, these companies have developed so many different applications (think OX Xtend 2, webBasedTrading, etc.) that it can be difficult for the average trader to hang their trading hats. This is the choice dilemma, and we know there are points to be made on both sides of this argument.

TradeMONSTER, on the other hand, offers a web-based tool that just works -- and it thinks like an investor. This is not meant to be a review of the tradeMONSTER platform but rather a comment on their approach. It's not that investor shouldn't have the ability to enter an OCO (one cancels other) order, the team told me, it's that they shouldn't have to know that it's called an OCO. It should just be an intuitive step in the order entry process.

It is with this approach in mind that tradeMONSTER rolled out their tradeCYCLE approach to active investing. Nothing in the process is new, they told me, it's just packaged as a whole experience for the first time. From homework to testing to executing to setting up an exit, the cycle is meant to walk you through a series of steps.  Think of it as a constant reminder for investors and traders of the steps they should take whenever executing a new trading idea, from end-to-end. 

In the scheme of things, tradeMONSTER is still young and still an experiment in progress. But it is an experiment we will enjoy watching.