TRADE-OFF; EXTENDED FINANCIAL MARKET HOURS REVOLUTIONIZE DEALMAKING.

Byline: Chris Sieroty Staff Writer

Frank Taylor is not your typical investor. The West Hills resident trades online and at all hours of the day - and night - because he needs to be at his job at KCRW-FM in Santa Monica by 3 a.m. each weekday.

Until recently, that meant he was submitting buy and sell orders through his online account in the middle of the night when the markets were closed and having to wait to find out what prices his orders received.

Now, thanks to after-hours trading, Taylor, the station's morning producer, has the option of trading live and knowing instantly what prices he's getting and taking advantage of prices when he sees an opportunity.

Taylor and thousands of investors like him are taking part in a technology revolution that has made it possible for them to trade stocks at all hours of the day from their home computers.

Much like the introduction of discount brokerages 20 years ago lowered the cost of owning stocks for the average American, the ability to trade securities after-hours brings with it the promise of further price reductions and more middle-class workers taking part in the financial world.

Investors can now log on at almost any hour of the day and buy or sell to their heart's content, for about $8 a trade, without having to wait for the markets to ``officially'' open. And if industry officials' predictions are correct, investors will soon be able to sell their Microsoft shares or buy a block of McDonald's, or whatever, around the clock.

``The move to extend trading hours has been driven by technology,'' said Nasdaq spokesman Scott Peterson. ``Never before have so many people had access to information from their computer.''

There are scores of brokerages offering some form of online after-hours trading already, but trading is relatively light, only a relatively few number of companies' shares can be traded and the window of opportunity is still limited.

Datek Online, for example, offers its clients the chance to trade from 5 a.m. to 6:30 a.m and 1:30 p.m. to 5 p.m. PDT. Datek spokesman Michael Dunn says trading hours were extended because ``there are a lot of people living in other parts of the country that will now have more time to place a trade.''

``Now people on the East Coast can have trades executed when they get home from work,'' Dunn said. ``It also gives investors a chance to react to company news released after the closing bell.''

The Nasdaq exchange began reporting after-hours prices for stocks on smaller and regional exchanges last month. ``Volume has been slim, but we do expect it to grow over time,'' said Peterson.

The Consolidated Tape Association reports after-hour prices for the NYSE and AMEX stock exchanges.

Based in New York, Market XT Inc. handles after-hour trading for a number of brokerage firms, including Morgan Stanley/Dean Witter online, Dreyfus Brokerage Services, Salomon Smith Barney and Mydiscountbroker.com.

Spokeswoman Allison Fillmore says with up to 40 percent of online stock orders coming after the market close, the company hopes to appeal to the 3.7 million households projected to invest more than $3 trillion online by 2003.

Brian Dorf, Datek's associate manager for public affairs, said the online brokerage experienced its greatest volume of extended-hour trading on Nov. 8 in connection with a judge's ruling in the Microsoft anti-trust case.

Dorf said 2,479 orders were placed before the market opened and 1,738 orders were placed during after-hours trading.

Dunn said Datek Online expects to offer its clients a 22-hour trading day early in the first-quarter of next year.

It will take several years to make the jump to a 24-hour trading day, he said.

For Taylor, the eventual move to a 24-hour trading day would mean even quicker and faster stock transactions.

``I would love 24-hour trading,'' said Taylor. ``I could put in a limit order and let it hit overnight instead of waiting for the morning.''

``I could put in a limit order on RealNetworks to be sold overnight when it reached $104 per share, then I could also put in an order to buy back in at $95 a share during the day,'' he said.

However, Taylor also said any move to a round-the-clock market wouldn't affect how he trades.

``I'm not going to check my stocks at 9 p.m.,'' added Taylor, whose alarm clock wakes him up at 2 a.m. on weekdays. ``If I'm up before the market like I usually am, it will allow me to make a trade, and get an immediate response.''

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2 Photos

Photo: (1 -- color) Frank Taylor, morning producer at radio station KCRW in Santa Monica, can only trade stocks at odd hours of the day because of his 3-9 a.m. work hours.

(2 -- color) West Hills resident Frank Taylor checks the stock market page on his computer at work while taking a break from his job.

Michael Owen Baker/Staff Photographer