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TD Ameritrade's (AMTD) October Daily Client Trades Drop

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Omaha, NE-based online brokerage firm, TD Ameritrade Holding Corporation (AMTD - Free Report) came up with average client trades per day of 438,000 in its activity report for Oct 2016. While the reported figure declined 4% from the prior month, it remained stable compared with the prior-year period.

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

As of Oct 31, 2016, TD Ameritrade reported $764.2 billion in total client assets, down 1% from the prior month and up 9% year over year. Average fee-based balances were $169.2 billion, stable compared with the prior month and up 8% from the prior-year period. Average spread-based balance of $115.2 billion increased 2% from the prior month and 12% year over year.

Mixed Quarterly Performance

During fiscal fourth-quarter 2016 (ended Sep 30), average client trades per day decreased 7.2% year over year to 444,281. At the end of the quarter, net new client assets totaled $15.1 billion, down 6.8% year over year.

However, total client assets came at $773.8 billion, up 15.9% year over year. While average spread-based balance was $110.9 billion, up 11.1% year over year, average fee-based investment balance was up 7.6% to $169 billion.

TD Ameritrade Poised for Growth

Innovations in online trading, long-term investment in products and services, delivery of advanced customer service and creative marketing and sales are TD Ameritrade’s key strategies for boosting its trading and investing business.

Further, the company’s association with The Toronto-Dominion Bank (TD - Free Report) provides an opportunity to cross sell its products. This is expected to significantly drive organic growth. Also, its latest deal in Oct 2016, to acquire Scottrade, is likely to be accretive to EPS in double-digit figure. The deal is also anticipated to drive annual expense savings of $450 million, with additional $300 million of savings in the long run.

However, we remain cautious as a continuous rise in expenses, margin pressure and stringent regulations may weigh on the company’s financials in the upcoming quarters.

At present, TD Ameritrade carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Among other investment brokers, Interactive Brokers Group, Inc.’s (IBKR - Free Report) Electronic Brokerage segment reported total client Daily Average Revenue Trades of 603,000 for Oct 2016, reflecting a decline of 7.9% from Oct 2015 and 7.4% from Sep 2016. Total customer accounts were 374,900, up 15% from the prior-year month and 1.2% from the preceding month.

The Charles Schwab Corporation (SCHW - Free Report) is expected to report its monthly metrics later this week.

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