E*TRADE’s Daily Average Revenue Trades Are Falling


Jan. 4 2016, Published 2:38 p.m. ET

Daily average revenue trades

E*TRADE (ETFC) reported DARTs (daily average revenue trades) of 156,000 during 3Q15, a rise of 4% from the prior quarter and 2% from the corresponding quarter last year. In October and November 2015, DARTs stood at 145,000 and 149,000, respectively. Options formed 23% of total DARTs, a level relatively consistent with the past couple of years.

Margin balances as of September 30, 2015, fell marginally to $7.9 billion, lower by 2%. In the fourth quarter, balances have fallen steeply to $7.5 billion, reflecting weaker markets and falling asset classes.

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Average commissions

E*TRADE’s average commission per trade has risen continually over the past few years. In 3Q15, the company saw a marginal fall in its average commission per trade to $10.87, compared to $10.96 in the prior quarter and $11.05 in 3Q14.

In the third quarter, the company’s commissions, fees, service charges, and other revenues were $170 million. This amount was higher than the prior quarter’s $167 million.

Average commissions per trade fell. This, combined with reduced trading activity in the overall market, led to a fall in revenues. The company will benefit more from its long-term assets, especially in the stock markets that have lower trading activity.

Here’s how a few of the company’s peers in the brokerage industry fared in terms of revenue in the last 12 months:

  • Interactive Brokers (IBKR) posted revenue of $1.1 billion.
  • TD Ameritrade (AMTD) posted revenue of $3.1 billion.
  • Charles Schwab (SCHW) posted revenue of $6.2 billion.

Together, these companies form 16.1% of the iShares US Broker-Dealers and Securities ETF (IAI).


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