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



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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