Back to top

Image: Bigstock

E*TRADE's (ETFC) May 2020 DARTs Increase 6% From April

Read MoreHide Full Article

E*TRADE Financial (ETFC - Free Report) has reported a rise in Daily Average Revenue Trades (DARTs) for May. According to its monthly-market activity, the company’s DARTs came in at 982,000, up 6% from the previous month and more than 200% year over year. Notably, derivatives comprised 26% of DARTs in the reported month.

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 primarily reflects investors’ willingness to invest in equity markets.

At the end of the reported month, E*TRADE’s total number of accounts were 7.8 million, comprising 5.7 million retail accounts, 2 million corporate services accounts, and 0.1 million advisor services accounts.

E*TRADE’s total accounts included 116,447 net new accounts for May. The 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 $4.6 billion compared with the $5 billion reported last month. There were negative net new advisor service assets of $0.1 billion.

At the end of May, E*TRADE’s customer security holdings were $307 billion, up from the $289.8 billion witnessed in April. The company’s brokerage-related cash came in at $90 billion compared with the previous month’s $86.5 billion. Additionally, on-balance sheet customer cash and deposits for the company totaled $56.6 billion compared with the $56 billion recorded in April.

Peer Performance

Interactive Brokers Group (IBKR - Free Report) recently released the Electronic Brokerage segment’s performance metrics for May. The segment reported a surge in DARTs on a year-over-year basis. This was attributed to a rise in trading activities due to concerns over the coronavirus crisis. Total client DARTs were 1,720,000, surging 84% from May 2019 but declining 4% from April 2020.

The Charles Schwab Corporation (SCHW - Free Report) has also reported the monthly activity report for May, which shows strong results compared with the prior month. Core net new assets of $17.6 billion climbed 15% from the previous month and 2% year over year. Total client assets came in at $4 trillion, up 6% from the prior month and 14% from the year-ago month.

Among other discount brokers, LPL Financial Holdings Inc. (LPLA - Free Report) is likely to report monthly performance metrics in the coming days.

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.

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 gained 61.6% in the last three months compared with the industry’s growth of 30.1%.

More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>