TD Ameritrade Holding Corporation
) - an online brokerage firm - reported a fall in Daily Average
Revenue Trades (DARTs) for the month of August 2012. The company's
DARTs stood at 303,000 in the reported month, slipping 9% from the
prior month and 37% from the prior-year month.
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Sluggish economic recovery, strict regulatory environment and
investors' cautious attitude to invest in the equity markets, were
the primary reasons behind the fall in DARTs.
Broker performance is generally measured through the DARTs that
represent the number of trades, from which brokers can expect
commissions or fees.
For August 2012, TD Ameritrade reported $461.2 billion in total
client assets, up 15% year over year and 3% compared with the prior
month. Moreover, average spread-based balances increased 12% from
August 2011 and 2% from July 2012, to $76.0 billion.
At the end of August, average fee-based balances were recorded at
$93.4 billion, rising 18% from the prior-year month and 3% from the
As of June 30, 2012, DARTs were 355,000, down 4% year over year.
Net new client assets reported were $9.7 billion, reflecting an
annualized growth rate of 9%.
TD Ameritrade reported $445 billion in total client assets, up 8%
year over year. Moreover, average spread-based balances increased
18% year over year to $73.8 billion. Average fee-based balances
were recorded at $88.2 billion, up 8% year over year.
The competitive position of brokerage business in the market
depends on trading customers, especially active traders. As the
group of long-term investors is less developed than that of the
trading customers, there is a chance of future growth if the former
Innovations in online trading and long-term investing products and
services, delivery of advanced customer service, creative as well
as cost-effective marketing and sales along with expense discipline
can be considered as the key factors behind TD Ameritrade's
strategy of boosting its trading and investing business.
Amidst a volatile operating environment, TD Ameritrade witnessed a
rise in organic client asset. However, the company's trading
volumes declined, which remains a matter of concern. Further,
a low interest rate and stringent regulatory environment are
expected to be the dampeners in the future.
TD Ameritrade currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating.
Among TD Ameritrade's peers,
Charles Schwab Corp.
E*TRADE Financial Corporation
) are anticipated to release their Monthly Activity Report for
August, later this week.