Pedestrians walk in front of an E * Trade financial office in New York, United States.
Daniel Acker | Bloomberg | Getty Images
E-Trade's trading activity and new accounts increased in the second quarter due to a retail investment boom that started during the turmoil in the coronavirus market.
The broker, which is expected to be acquired by Morgan Stanley in the second half of 2020, reported a record 1.01 million daily active sales transactions in the second quarter on Thursday, an increase of 267% compared to daily business last year. This is an increase of 657,000 daily trades in the first quarter.
Major online brokers – Charles Schwab, TD Ameritrade, E-Trade and Robinhood – saw an increase in new accounts and trading activity during the corona virus recession this year. The brokerage industry experienced a gold rush in retail when retail investors saw the market trend and the subsequent recovery as an opportunity.
After adding a record 329,000 new accounts in the first quarter, E-Trade added 327.00 new retail accounts in the second quarter. The broker only added 34.00 new accounts in the second quarter a year ago.
The broker's rapid growth has resulted in retail asset flows increasing to $ 31.9 billion since the beginning of the year and account growth to $ 656,000.
"In the first half of this year alone, we achieved greater growth in retail organic assets than in the previous two years combined and stronger growth in retail organic accounts than in the past five years combined," said Mike Pizzi, CEO of E -Trade, in a company announcement.
Since last week, Charles Schwab, TD Ameritrade and Interactive Brokers have reported similar increases in trading activity and new accounts in the second quarter.
E-Trade also outperformed the second quarter income statement. The broker earned $ 88 cents per share on sales of $ 716 million. According to Refinitiv, Wall Street expects earnings of 76 cents per share on sales of $ 676 million.
"We have achieved our highest sales ever with trade-related activities, which more than offset the pressure on net interest income compared to the previous quarter given the Fed's recent rate cuts to almost zero," said Chad Turner, CFO of E-Trade the release.
E-Trade shares fell somewhat in expanded trading on Thursday.
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