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TD Ameritrade Invests in Regulated Crypto Exchange Platform

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TD Ameritrade Holding Corporation (AMTD - Free Report) is investing in a regulated derivatives exchange and clearing organization — ErisX, with an aim to make digital currency products more accessible to retail clients. Financial terms of the deal were not disclosed.

ErisX will develop cryptocurrency trading products for TD Ameritrade’s clients. Notably, the plan is to provide traders access to cryptocurrency spot contracts as well as futures contracts on a single exchange.

In December 2017, the brokerage firm enabled access to bitcoin futures contracts to approved clients on the Cboe Futures Exchange. However, this latest investment will allow trading of other cryptocurrency futures such as Etherium and Litecoin.

Through this new platform, retail clients will be able to access and trade digital currency products in the same way as traditional capital markets but in well-regulated and transparent environment.

Apart from TD Ameritrade, other investors funding the ErisX platform are DRW Venture Capital, Valor Equity Partners, TD Ameritrade and Virtu Financial.

Managing director of Futures & Forex at TD Ameritrade, JB Mackenzie stated, “As a strategic investor in the initiative, we look forward to working with the team at ErisX as they develop and launch digital currency products designed to fulfill the needs of retail investors.”

Moreover, this investment highlights TD Ameritrade’s commitment to innovate and offer customers a “best-in-class investing and trading experience.”

TD Ameritrade’s strong trading volumes, client focus and inorganic growth efforts are anticipated to yield positive results for the stock. Though rising expenses might hamper bottom-line growth, recent interest rate hikes are likely to provide stability to the top line.

Shares of TD Ameritrade have rallied 3.9% so far this year against 6.5% decline recorded by the industry.


The stock currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the finance space are E*TRADE Financial Corporation (ETFC - Free Report) , Prospect Capital Corporation (PSEC - Free Report) and The Carlyle Group L.P. (CG - Free Report) , carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 60 days, E*TRADE’s Zacks Consensus Estimate for current-year earnings has been revised nearly 1% upward for 2018. Further, the company’s share price has rallied 19.4% over the past year.

Prospect Capital’s current-year earnings estimates have moved 9% upward over the past 60 days. Further, the company’s shares have jumped 7.5% in a year’s time.

Over the last 60 days, the Zacks Consensus Estimate for Carlyle for the current year has been raised 1.3% upward. Over the past six months, shares of the company have gained 10.4%.

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