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E*TRADE's (ETFC) January 2020 DARTs Rise 31% From December

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E*TRADE Financial ETFC has reported a rise in Daily Average Revenue Trades (DARTs) for January. According to its monthly-market activity, the company’s DARTs came in at 463,739, up 31% from the previous month and 68% year over year. Notably, derivatives comprised 33% of DARTs in January.

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 the reported month, E*TRADE’s total number of accounts were approximately 7.3 million, comprising about 5.2 million retail accounts, 1.9 million corporate services accounts, and 0.2 million advisor services accounts.

E*TRADE’s total accounts included 40,008 net new accounts for January. Total number of brokerage accounts highlights the company’s ability to gain and retain customers who trade and invest.

Moreover, E*TRADE’s net new retail assets came in at $2.6 billion compared with the $2.7 billion reported in the last month. There were no net new advisor service assets.

At the end of January, E*TRADE’s customer security holdings were $315.1 billion, up from the $310.7 billion reported in December. The company’s brokerage-related cash came in at $72.3 billion compared with the previous month’s $71 billion. In addition, bank-related cash and deposits for the company totaled $2.2 billion, down from the $6.4 billion recorded in December 2019.

Peer Performance

Interactive Brokers Group, Inc. (IBKR - Free Report) recently released its Electronic Brokerage segment’s performance metrics for January 2020. Total client DARTs were 1,019,000, up 32% from December 2019 and 20% from January 2019. On an annualized basis, the company recorded Cleared Average DARTs per customer accounts of 329,000. This reflects a rise of 30% sequentially and 3% year over year.

Among others, The Charles Schwab Corporation SCHW and LPL Financial Holdings Inc. LPLA will likely release their January monthly activity reports soon.

Our Viewpoint

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

The company’s shares have gained around nearly 9.8%, in the last six months, compared with 26.3% growth recorded by the industry.

E*TRADE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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