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Q: Online Trade ( Answered,   0 Comments )
Question  
Subject: Online Trade
Category: Business and Money > Finance
Asked by: want_to_know-ga
List Price: $100.00
Posted: 06 Nov 2006 04:18 PST
Expires: 06 Dec 2006 04:18 PST
Question ID: 780460
I would like to get market size of the "online stock trade" market
compared to all stock trade market,and forecast for upcoming years.
for the US and global.
who are the biggest players in the online market, their revenues, and
number of customers? Etrade, Ameritrade...
what are the number of customers that use these services? and forecast
for upcoming years.
what are the number of transactions made by these services? and
forecast for upcoming years.
how much of these transactions made by the "day traders"? and what is
the % of them from the total?
Haim

Request for Question Clarification by keystroke-ga on 06 Nov 2006 06:42 PST
Hello want_to_know,

All your information can be found except for the last bit--
information on day trading.  As far as day traders and online stocks
go, I couldn't find anything.  Would an answer to your first questions
suit you?

--keystroke-ga

Clarification of Question by want_to_know-ga on 06 Nov 2006 08:16 PST
you wrote:
"As far as day traders and online stocks
go, I couldn't find anything"
can you tell me please, what questions cant you answer?
my questions are:
1 - I would like to get market size of the "online stock trade" market
compared to all stock trade market,and forecast for upcoming years.
for the US and global.
2 - who are the biggest players in the online market, their revenues, and
number of customers? Etrade, Ameritrade...
3 - what are the number of customers that use these services? and forecast
for upcoming years.
4 - what are the number of transactions made by these services? and
forecast for upcoming years.
5 - how much of these transactions made by the "day traders"? and what is
the % of them from the total?

thanks
Haim
Answer  
Subject: Re: Online Trade
Answered By: keystroke-ga on 05 Dec 2006 21:55 PST
 
Hello Haim,

Thank you for your question.  Due to the lack of email notifications,
I did not see your clarification until today.  Since it is so close to
the question's closing date and Google Answers is closed to new
questions, you are unlikely to see any clarification that I post
regarding the question, so I'll go ahead and answer your question the
best I can and you can ask me for clarification if you wish.

"who are the biggest players in the online market, their revenues, and
number of customers?"

I answer the customer question in a separate question below.

1. Charles Schwab

Revenues in 2006: $1 billion

Total client assets: $1.3 trillion

Online Trading Blog
http://onlinetrading.eslblogs.org/

"As one of the nation?s largest financial services firms, Schwab
serves more than 6.8 million client brokerage accounts, 540,000
corporate retirement plan participants, 183,000 banking accounts ? all
representing more than $1.4 trillion in client assets."

---
2.Fidelity Investments

$11.1 billion in revenues
$1.4 trillion in managed assets

---
3. TD Ameritrade

5.5 million clients 
$219 billion in client assets

"During Ameritrade's 2006 fiscal year, the company earned $526.8
million, or 95 cents per share, up 55 percent from 2005. But when a
one-time gain from the sale of its investment in Knight Capital Group
Inc. is excluded, the company earned $483 million, or 87 cents per
share, in 2006.

For the full fiscal year, analysts polled by Thomson Financial
expected earnings per share of 89 cents on revenue of $1.83 billion."
http://biz.yahoo.com/ap/061024/earns_td_ameritrade.html?.v=6
"TD Ameritrade Profit Rises 36 Percent"

4. ETrade

Revenue of $478.9 million in 2005
$403.7 million in 2004
Client assets of $191.4 billion

5. Scottrade
Client assets of $51 billion, up from $32.5 billion in 2005
72 percent increase in revenue from 2005
$796 million in revenues, compared to $464 million in fiscal year 2005

----------

"what are the number of customers that use these services? and forecast
for upcoming years."

Charles Schwab--
6.7 million client brokerage accounts

Fidelity--
Fidelity had 16.6 million accounts in 2005, up 16 percent from 2004.

TD Ameritrade--
5.5 million clients 
$219 billion in client assets

ETrade--
4.4 million client accounts

Scottrade--
1.48 million clients, 28% increase from 2005

---

The future five-year growth for ETrade, Charles Schwab and Ameritrade
has been predicted thusly:

ETrade          12.16%
TD Ameritrade   16.25%
Charles Schwab  16.78%

The percentage growth that they will need over the next few years in
order to break even for their stockholders is this:

ETrade          12.15%
TD Ameritrade   12.11%
Charles Schwab  12.82%

As you can see, TD Ameritrade and Charles Schwab have room for error,
but ETrade does not have room to not grow over the next few years and
still make profits.

Overall, analysts believe that online stock brokerage has not reached
its full potential; it is at 35% capacity now as opposed to 75%
capacity during the 2000 dot-com boom.  However, there will most
likely be more consolidation in the industry and more cutting of
prices to stave off competition among the brokerages.

Seeking Alpha--
"Online Brokers' BlasŤ Response To BOA May Come Back To Haunt Them"
http://seekingalpha.com/article/21498

----------

"what are the number of transactions made by these services? and
forecast for upcoming years."

This is best measured by Daily Average Revenue Trades (DART), or how
many paid trades the company has per day.

Charles Schwab had DART of 293,300 so far in 2006.

Fidelity had daily trades of 256,723 in 2005, up 25% from 204,984
daily trades in 2004.

TD Ameritrade reports 232,000 as of October 2006.

ETrade has daily average trades of 151,665 in 2006.

Scottrade does not release these numbers.

--

Analysts predict that overall online stock trading will increase as
more people get access to the Internet and as stock market conditions
get more favourable to traders.  More people will feel free to leave
traditional brokers for online ones like Charles Schwab.  As you can
see in the above numbers, some companies increased their business by
50% this year.  Consolidation will affect the industry and prices will
be forced down by free traders such as Zecco, but most of the brokers
don't make money from trades but from fees anyway, so they should be
well-placed for growth.

----------

There are approximately 255,000 day traders in existence, a small
portion of online traders.  The number of day traders will increase
when the market rises.  The percentage of transactions is very small. 
Online brokers do not publish this information and it would be a
breach of privacy for them to keep track of and publish that data
about their customers.

"Do Day Traders Make Money?"
http://www.investorhome.com/daytrade/profits.htm

----------

Sources:

IBM "Retail online brokerage trends"
http://www-03.ibm.com/industries/financialservices/doc/content/resource/thought/1595640103.html

Bloomberg
"E*Trade, TD Ameritrade Are Targeted in Online Brokerage Fraud"
http://www.tradersblogonline.com/2006/10/etrade_td_ameritrade_are_targeted_in_online_broker.html

Ameritrade History
http://www.amtd.com/about_us/history04.cfm

Wikipedia Entry-- TD Ameritrade
http://en.wikipedia.org/wiki/Ameritrade

Fidelity Press Release
"Fidelity Introduces Annuities and Insurance Program for Registered
Investment Advisors"
http://content.members.fidelity.com/Inside_Fidelity/fullStory/1,,3948,00.html

Fidelity Press Release
"FIDELITY INVESTMENTS ANNOUNCES 2005 FOURTH-QUARTER
AND FULL-YEAR RESULTS FOR FIDELITY BROKERAGE COMPANY"
http://www.nationalfinancial.com/pr_423326.shtml

Wikipedia Entry-- Fidelity Investments
http://en.wikipedia.org/wiki/Fidelity_Investments

MarketWatch
"E-Trade net rises 44%"
http://www.newsalert.com/news/story/e-trade-net-rises-44-interest/story.aspx?guid=%7B6AFBFAC3-72E1-41A9-9F1D-828F856B3489%7D

Wikipedia Entry-- Scottrade
http://en.wikipedia.org/wiki/Scottrade

Search terms:
(Google)
ameritrade second largest
ameritrade revenues 2006
ameritrade client accounts
ameritrade client accounts million
fidelity second largest
fidelity second largest broker
charles schwab dart 2006
fidelity revenues 2005
etrade revenues 2006
scottrade revenues 2006
how many day traders

(Google News Search)
ameritrade revenues

If you need any additional clarification, let me know and I'll be glad
to assist you.

--keystroke-ga
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