Ameritrade Aims to Attract More Customers with Trade Architect

by Trefis Team
-7.73%
Downside
31.79
Market
29.33
Trefis
AMTD
Ameritrade
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Ameritrade (NYSE:AMTD) announced the launch of its new trading platform, Trade Architect, earlier this month. The platform is targeted at retail investors who want to explore more sophisticated tools that can help them make more strategic investments while ensuring ease-of-use. [1] Ameritrade claims that this new platform is essentially a “bridge ” between their basic online trading solutions and their professional-grade trading software. Ameritrade allows individual investors to trade equities, options and other securities, but also offers money market account services to clients through TD Bank USA. It competes with other online brokerages and financial services firms like E-Trade (NASDAQ:ETFC), Charles Schwab (NYSE:SCHW), Wells Fargo (NYSE:WFC) and Bank of America (NYSE:BAC).

Understanding the Trade Architect Platform

Trade Architect is a web-browser based trading platform that allows investors to view and graph data in real-time, allowing them to gauge their risk and returns better. Premium news content, including Dow Jones real-time news and streaming CNBC, are integrated to help investors stay up-to-date with current events. The platform also intends to increase options trading by including proprietary tools and integrated education resources that are aimed at educating investors about option strategies.

But most importantly, Ameritrade claims that content delivery on the platform is very easy to use, which will help investors adopt it quicker.

What it Means to Ameritrade

Ameritrade has been working hard to attract, and retain, more retail investors in the highly competitive online brokerage industry. The innovation and focus on the customer experience is evident from the accolades the firm has received in the recent past, including being ranked the #1 online broker by Kiplinger’s and being ranked 2nd among all discount brokers by SmartMoney Magazine. [2]

An increase in the number of active brokerage accounts directly increases the company’s revenues in the form of trading commissions. To understand the impact of an increase in the number of accounts on the company’s estimates, you can make changes to the interactive chart above.

We maintain a price estimate of $22.71 for Ameritrade, implying a premium to market price.

See our full analysis for Ameritrade here

Notes:
  1. TD Ameritrade Launches Trade Architect, Ameritrade News Releases, May 4 2011 []
  2. TD Ameritrade Earns 5 Stars for “Customer Service” in SmartMoney’s 19th Annual Broker Review, Ameritrade Press Releases, May 10 2011 []
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