onlinetradinginc.com sold its own shares for $7 apiece in June 1999, one of the smaller deals of a busy summer. Online trading was a defining story of the bull market. Millions of people opened accounts with internet brokers, and low commissions drew a new crowd of active traders. This small Florida brokerage sold self-directed trading through its website. It went public hoping to grow as more investors moved their accounts online.

Lean, Cheap, and Fast

The bet was simple. As trading moved to the web, a lean online broker could win customers on price and service. Like its competitors, the firm earned money from commissions on each trade. Its revenue rose and fell with the market's mood. Smaller brokers like this one faced well-funded rivals that spent heavily on advertising to win accounts. Price and speed were its main selling points.

When the Volume Dried Up

onlinetradinginc.com priced its offering at $7 a share in June 1999. Its underwriter, Werbel-Roth Securities, sold 2,587,500 shares, counting the extra shares it sold on July 1. Trading volume fell when the market turned in 2000. That put pressure on every online broker that lived on commissions. In the years that followed, the industry consolidated quickly. Larger firms bought up smaller ones and fought over price.

Cover: Study for The Speculators at the Palais Royal, Louis-Léopold Boilly. Art Institute of Chicago, public domain. Chosen for speculators trading at the Palais Royal.