UPDATE 3-TradeStation stock falls on weak Q4 profit, outlook

* Q4 EPS $0.07 vs $0.18 last year

* Brokerage commissions and fees drops 25 pct

* Sees Q1 2010 EPS of $0.05 - $0.07

* Sees FY 2010 EPS of $0.27 - $0.46

* Shares fall 10 pct (Recasts, adds analyst comments, conference call details)

By Abhinav Sharma

BANGALORE, Feb 11 (Reuters) - TradeStation Group Inc's TRAD.O quarterly profit slumped 64 percent as weak brokerage commissions and fees ate into earnings, and the online broker forecast a dismal first quarter, sending its shares down 10 percent.

For 2010, the company expects daily average revenue per account to be at the same level as second-half of 2009, it said on a conference call.

TradeStation may not get any boost from its investment in the U.S. Treasury bills as it does not expect further changes to the yield on those bills and notes until the Nov. 3, 2010 Federal Reserve meeting.

The company pegged its earnings target for the current quarter in the range of 5 cents to 7 cents per share, on revenue of $32.0 million to $34.0 million.

Analysts were expecting a profit of 9 cents a share on revenue of $33.6 million, according to Thomson Reuters I/B/E/S.

"Weaker new account growth will likely hamper future trading volumes over the longer-term, and we believe this trend needs monitoring before we would get more constructive on the stock," analyst William Tanona of Collins Stewart wrote in a note.

Net new accounts for the quarter were 607, down from 647 accounts in the third quarter, analyst Tanona said.

"February daily average revenue trades (DARTs) are down 5-10 percent sequentially, analysts at Sandler O'Neill wrote in a note to clients.

DARTs, a key measure of trading activity for brokerage firms, were up 22 percent for TradeStation in January.

"The expenses are expected to grow which could give them a little bit of leeway, to reach their guidance range," analyst Mike Adams of Sandler O'Neill said.

In 2010, compensation costs will go up due to a full year effect of all the people that the company hired during 2009, TradeStation said.

For the fourth quarter, net income was $2.7 million, or 7 cents a share, compared with $7.6 million, or 18 cents a share, in the year-ago period.

Analysts expected the company to post earnings of 8 cents a share, according to Thomson Reuters I/B/E/S.

Brokerage commissions and fees fell 25 percent, while daily average revenue trades dropped 35 percent during the quarter.

Shares of the company were down 9 percent at $6.52 in late afternoon trade Thursday on Nasdaq. (Reporting by Abhinav Sharma; Editing by Ratul Ray Chaudhuri, Anil D'Silva and Gopakumar Warrier)