Ameritrade’s Trading Volumes Gains Impressively In November After Remaining Subdued For Most Of 2016

TD Ameritrade (NASDAQ:AMTD) saw growth across all its key monthly metrics in November, primarily driven by a surge in daily trades (+23% year over year) and interest earning assets (+16% year over year). After remaining almost flat for most of the year, trading volumes increased 23% from the previous month as well. The recently concluded U.S. presidential elections and the improvement in the GDP and employment rates has possibly led to increased volatility in the stock market. Consequently, we saw a massive increase in trading volumes for the brokerage. With the volatility likely to sustain in the near term, we expect marked growth in the brokerage’s trading commission in the near term.

The interest rate hike in last December and expectations of additional hikes this year has kept the interest earning assets high all throughout the year and the revenues from these assets continued to be the major source of company’s overall revenue. Although, the yields on these assets remain low in comparison to other competitor brokerages (Charles Schwab and E-Trade) . the acquisition of Scottrade will provide scale to Ameritrade, and possibly cause the yields to improve. With the recent hike and expectations of a series of hikes in the upcoming year, we believe the interest earnings assets and earnings from them will continue to grow phenomenally.

With increasing demand for customers seeking expert financial advice to manage their assets, assets under management have also continued to grow impressively at over 5% year to date. The digital advisory business and the company’s focus on newer investment products to meet customer demand are likely to drive these asset volumes and consequently, higher investment product fees in future.

Please refer to our complete analysis for Ameritrade.

View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research