E*Trade Shares Slump On Heavy Volume

NEW YORK (TheStreet) -- E*Trade Financial (ETFC Quote) shares continued to trade heavily on Tuesday, but the stock ended the day in the red.

E*Trade was by far the most active stock on the Nasdaq exchange Tuesday with in excess of 250 million shares changing hands. The issue's level of activity was more than double that of the second most active stock on the exchange -- Delta Petroleum (DPTR Quote) at 93 million -- and well ahead of its three-month daily average of 86.6 million. As was the case on Monday, E*Trade was again the second most actively traded U.S.-based stock for the session behind Citigroup (C Quote). E*Trade shares closed at $1.92. down 3.5%, pulling back from a session-high of $2.08.

E*Trade shares ended Monday up 11%, despite a lack of obvious news. The stock's rise followed a surge on Friday after Goldman Sachs analysts upgraded the stock to a buy rating and lifted a six-month price target to $2.30.

Some investors suggested that the stock's push higher on Monday was a continuation of Friday's positive move. But Monday's price surge came in the afternoon, well after investors had time to digest the Goldman call, which arrived before Friday's opening bell.

Others speculated that perhaps the company was potentially getting ready for a sale to one of its rivals, TD Ameritrade (AMTD Quote) or Charles Schwab (SCHW Quote).

E*Trade does have two things going for it -- a recently completed recapitalization plan through debt swaps and an equity offering, in addition to a well-performing brokerage business.