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E*TRADE (ETFC) Reports 9% Sequential Growth in October DARTs

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E*TRADE Financial (ETFC - Free Report) has reported a sequential rise in Daily Average Revenue Trades (DARTs) for October. According to its monthly market activity, the company’s DARTs came in at 290,578, up 9% from the previous month, but down 1% year over year. Notably, derivatives comprised 36% of DARTs.

Broker performance is generally measured through DARTs that represent the number of trades from which brokers can expect commission or fees. The rise in DARTs largely reflects investors’ willingness to invest in equity markets.

At the end of October 2019, E*TRADE’s total number of accounts were approximately 7.2 million, comprising about 5.1 million retail accounts, 1.9 million corporate services accounts, and 0.2 million advisor services accounts.

E*TRADE’s total accounts included 13,535 net reductions for October. Total brokerage accounts highlight the company’s ability to gain and retain customers who trade and invest.

Moreover, E*TRADE’s net new retail assets came in at $0.7 billion compared with $1.4 billion reported in the previous month.

At the end of October, E*TRADE’s customer security holdings were $291.6 billion, up from the $284.7 billion in September. The company’s brokerage-related cash came in at $66.1 billion compared with the previous month’s $65 billion. In addition, bank-related cash and deposits for the company totaled $10 billion, up from the $9.6 billion recorded in September.

Peer Performance

Interactive Brokers Group, Inc. (IBKR - Free Report) has released its Electronic Brokerage segment’s performance metrics for October 2019. The segment, which deals with the clearance and settlement of trades for individual and institutional clients globally, reported a decrease in DARTs.

Among others, LPL Financial Holdings Inc. (LPLA - Free Report) and Charles Schwab’s (SCHW - Free Report) are expected to release its October activity report this week.

Our Viewpoint

Though the uncertain macroeconomic environment might lead to lesser trading activities, growth in DARTs and new brokerage accounts will prove beneficial for the company.

E*TRADE currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company’s shares have lost around 15.4% over the past year compared with 1.8% decline recorded by the industry.

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