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TD Ameritrade’s Daily Trades Kept Rising in Past Few Quarters

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Increasing daily trades

TD Ameritrade Holding (AMTD) reported an average 434,000 daily trades in 3Q15. The company recorded an activity rate of 6.7% and growth of 8% on a year-over-year basis.

Derivatives accounted for 44% of the average trades per day compared to 42% in the previous quarter. The contribution of options has continually increased over the past few quarters. The daily trades for options increased by 15% on a year-over-year basis. The trading in futures benefited from volatility in commodities. Futures contracts formed 10% of the total activity. The activity through the mobile platform also increased, with the platform contributing its highest ever, almost 17% of the total activity.

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Average commissions

TD Ameritrade’s average commission per trade declined in the June quarter. In 3Q15, average commissions per trade declined by $0.53 on a year-over-year basis, resulting in $14 million less revenues, offset by $25 million incremental revenue on account of higher trades per day.

The average commission per trade in the quarter stood at $11.99 compared to $12.02 in the previous quarter and $12.52 in the prior year’s quarter. The transaction-based revenue increased by 3% to $328 million in 3Q15 compared to $350 in the previous quarter and $317 in the prior year’s quarter.

Here’s how a few of TD Ameritrade’s peers in the brokerage industry have fared in terms of revenues in the last 12 months:

  • Interactive Brokers Group (IBKR)—$1.1 billion
  • E*TRADE Financial Corporation (ETFC)—$1.8 billion
  • Charles Schwab Corporation (SCHW)—$6.2 billion

Together, these companies form 1.31% of the Financial Select Sector SPDR Fund (XLF).

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