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TD Ameritrade, E*Trade trading levels soar in Aug
September 12, 2011 / 5:30 PM / 6 years ago

TD Ameritrade, E*Trade trading levels soar in Aug

* TD Ameritrade DARTs up 33 pct from July

* E*Trade up 34 pct from July

* Both firms see client assets slip on equities weakness

TORONTO, Sept 12 (Reuters) - Trading volumes at TD Ameritrade Holding Corp (AMTD.O) and E*Trade Financial (ETFC.O) surged in August as market volatility increased, but weakness in equities led to a month-over-month decline in asset levels at the U.S. online brokerages.

TD Ameritrade said on Monday that its daily average revenue trades (DARTs) in August, at 484,000, were up 33 percent from July and up 57 percent from August 2010.

E*Trade said its DARTs in August, at 193,546, were up 34 percent from July and up 57 percent from August 2010.

“The strong volume metrics do not come as a surprise given the significant spike in volatility during the month,” Alex Kramm, analyst at UBS, said in a note to clients.

The downgrading of the U.S. credit rating by Standard & Poor’s in August, as well as worries about U.S. and European debt levels, shook markets and investors scrambled to react, sending trading levels higher. [ID:nN1E774236]

At the same time, doubts over the health of the global economic recovery increased, sending equities markets lower.

Omaha-based TD Ameritrade’s total client assets dropped 3 percent from July, but were up 21 percent from the year-before period, at $400.5 billion.

E*Trade’s total client assets were down 5.4 percent from July, at $172.8 billion. Compared with the year-before period, they were up 17.9 percent.

Since the drops in assets in August were less than the 6 percent market decline during the month, clients must have been adding to their accounts strongly, Kramm said.

Richard Repetto, an analyst at Sandler O‘Neill + Partners, said that based on retail trading proxies so far in September, he expects daily average trades at E*Trade to be down 20 percent in September from August.

New York-based E*Trade, at the insistence of its biggest investor, hedge fund Citadel LLC, is in the process of reviewing its options, including the possibility of putting itself up for sale. [nN1E76J0E7]

TD Ameritrade and brokerage giant Charles Schwab Corp (SCHW.N) have been tipped as possible buyers, but TD Ameritrade Chief Executive Fred Tomczyk said last week that he could not see obvious merit in doing such a deal, given doubts about E*Trade’s assets and the current “optimistic” price tag. [ID:nN1E78610P]

E*Trade has struggled with credit problems over the years due to some bad bets on home equity loans and securitized mortgage-backed securities in its bank unit.

The firm said that its total delinquent loans in August were down 1 percent from July and down 4 percent from June. (Reporting by John McCrank; editing by Peter Galloway)

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