NEW YORK (Dow Jones News) -- Innovative trading is moving beyond the Internet.

More and more investors are making trades on the run, with hand-held digital electronic devices like pagers, so-called smart phones and personal digital assistants like the Palm Pilot.Fidelity Investments already lets customers trade with pagers, and other major brokerages -- such as Morgan Stanley Dean Witter & Co.'s Discover Brokerage -- are working on offering wireless capabilities.

"It's already growing from a competitive advantage to a competitive necessity," said Edward Kountz, an analyst at the Tower Group, a Wellesley, Mass., banking-technology research firm. "Over the next year or two, you're going to find a significant number of firms offering these services."

Wireless transactions complement the options that brokerages are already offering such as broker-assisted, touch-tone telephone and Web trades, said Donna Oliva, chief executive officer of New York-based W-Trade Technologies.

"The trade is going directly into the brokerages order entry and trade execution system, and it's going over a wireless network," Oliva said. W-Trade is one of several companies that create the software that enable the trades and arrange for the needed wireless service.

At Fidelity and Muriel Siebert & Co., a unit of Siebert Financial Co., customers were given the option of trading through pagers in January. Discover and ETrade Group Inc. say they'll offer trading over Palm Pilots first.

Several smaller online brokerages, including Investrade Discount Securities Inc., 1800DAYTRADE.COM Inc. and the R.J. Forbes Group are also offering wireless trading to their customers.

Wireless executions won't be as revolutionary for the securities industry as online trading has been, industry executives and analysts agree. But it is likely to become a feature -- like real-time quotes or proprietary research -- that brokerages offer to win or keep accounts, they say.

So far, brokerage executives see wireless trading as a service to customers more than a large-scale profit-making tool.

Still, a few major online brokerages aren't so sure about that. Charles Schwab Corp., the nation's largest online broker, and other significant players like Datek Online Holdings Corp. and Ameritrade Holdings Corp. say they haven't seen much demand yet and aren't taking any steps towards offering the service.

Discover Brokerage says it is getting in early because it wants to be a technology leader, aiming for Palm Pilot trading by late April.

"Our commitment is to try to offer access the way people want it, and when people want it," said Thomas O'Connell, executive vice president and director of Internet Technologies and Operations.

Discover's wireless product will have many of the same functions as the Web site, such as access to account balances and the ability to trade, but won't use a graphic interface, he said.

Industry players say that wireless trading appeals to active investors on the move. The costs of the devices and their limited extent of coverage means they aren't the right tools for all investors.

"The market they are really going after is ... not per-se a day trader, but a mobile professional -- an executive who is traveling and away from his PC but is still an active trader and wants to be notified when key news happens or when price movements happen," said David Oros, president of Owings Mill, Md.-based Aether Technologies, a wireless data software and services provider.

Boston-based Fidelity launched its pager-based trading for active investors earlier this year and then expanded that service to account holders with more than $100,000. The company has signed on about 2,000 customers, a spokesman said.

For New York discount brokerage Muriel Siebert & Co., the pager service has been bringing in new accounts.

"We're getting a lot of people opening regular accounts, testing us first for a month or so and then saying they want to try the mobile broker," said Muriel Siebert, Chief Executive and Chairwoman of Muriel Siebert & Co.

"Some people think it's the best thing since chopped liver and other people think it's a wonderful gadget -- if you give it to me," she said.

But the gadgets are far from free.

The RIM pager costs $359 up front, or $23.95 a month under a lease, and the monthly service rates start at $49.95. For that price, investors can download stock quotes, check account balances, program alerts for share price movements and receive news stories over the wireless network.

On top of that, brokerages charge commissions. At Siebert, a basic wireless trade costs $29.95 -- twice the cost of a $14.95 Web trade. But at Fidelity, the price is the same as a Web trade.

At Discover, customers will need to buy a palm pilot or other hand-held device that runs on a Windows CE operating system for about $300 and a modem for another $300 plus the $69.95 a month for unlimited information, quotes and trading service. Trades will cost $19.95, the same price customers now pay for an Internet trade.

Most brokers that use the W-Trade system are charging a service fee of $29.95 to $60 dollars a month, which the brokerage customers pay in addition to commissions.