TD Ameritrade’s Client Trades Scale New High

TD Ameritrade’s Client Trades Scale New High
TD Ameritrade

Omaha, Nebraska-based online brokerage firm TD Ameritrade Holding Corp. (NYSSE:AMTD) stated a whooping monthly average client trades per day of 501,000 in its Activity Report for Feb 2014. This figure marked an all-time high in the company’s trading history.

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Further, the trading metrics look impressive as it continues to deliver an improved performance. The figure represents a 1% rise, breaking the previous record of 496,000 in the prior month, while it rose 30% year over year.

Broker performance is generally measured through monthly average client trades per day.  It represents the number of trades from which brokers can earn commissions or fees.

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TD Ameritrade reported $611.6 billion in total client assets in Feb 2014, up 22% year over year and 4% from the prior month. Moreover, average spread-based balances augmented 12% year over year to $91.7 while it was in line with Jan 2014.

Further, average fee-based balances climbed 19% year over year to $132.4 billion, while it came in line with the Jan 2014 figure.

Quarterly Performance

Average client trades per day in first-quarter fiscal 2014 (ended Dec 2013) increased 24% year over year to 414,000. However, net new client assets were $14.5 billion, down 7% from the past year.

At quarter end, TD Ameritrade reported total client assets worth $596.5 billion, up 24% year over year. Moreover, average spread-based balance was $90.3 billion, up 14% from $79.3 billion in the prior-year quarter. Average fee-based balance was $130.5 billion, up 31% year over year.

Our Viewpoint

Innovations in online trading, long-term investment in products and services, delivery of advanced customer services, creative as well as cost-effective marketing and sales, along with prudent expense management are TD Ameritrade’s key strategies to boost its trading and investing business.

Further, the company’s association with The Toronto-Dominion Bank (TD) provides an opportunity to cross sell its products. This is expected to be a significant growth driver for TD Ameritrade’s organic assets.

However, amid a volatile operating scenario, a low interest rate environment and stringent regulations may pose challenges to the company’s financials in the long run.

At present, TD Ameritrade carries a Zacks Rank #1 (Strong Buy).

Among other investment brokers, The Charles Schwab Corp. (SCHW) and E*TRADE Financial Corp.(ETFC) are expected to report their monthly metrics later this week.

TD AMERITRADE (AMTD): Free Stock Analysis Report

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SCHWAB(CHAS) (SCHW): Free Stock Analysis Report

TORONTO DOM BNK (TD): Free Stock Analysis Report

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