For the fourth time this year, customers of Charles Schwab (NYSE: SCH) were blocked from making online trades on Monday. Schwab’s Web site was down for 20 minutes in the morning because of a software glitch. Ironically, a spokesman said attempts to increase the site’s capacity were probably related to the problem.
Just last Wednesday, the site was down for 90 minutes, and there were two minor outages in January. Schwab is trying hard to fix its problems, but the question still remains: If the nation’s largest online broker can’t eliminate downtime, can anyone else? Hard to say, especially since E*Trade, Ameritrade and Datek have all had similar problems recently.
I’ve mentioned online investment banks as a possible alternative in the past, and now there’s another good reason to take a look. On Monday, online investment bank Wit Capital announced that Capital Z Financial Services has taken a $25 million (US$) stake in the company. The money will help Wit Capital start an after-hours trading system.