This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Online Brokers Face Light-Volume Pinch

NEW YORK ( TheStreet) -- A sooner than usual decline in U.S. equity trading volumes is likely to impact fourth-quarter numbers for online brokers such as E*Trade Financial (ETFC - Get Report) and TD Ameritrade (AMTD - Get Report), as well as the performance of specialty firms and exchanges.

While the markets typically experience a slowdown in trading activity as the holiday season kicks off, this year the decline has begun earlier than usual as the weak economy continues and investors worry that the financial crisis isn't over yet.

Traders and investors also typically lock in year-end positions at some point, whether for tax reasons or simply to take vacation time during the holiday season, and may be doing that earlier this year, given the strong run-up in stocks from the March lows.

In contrast, this summer saw a surge in trading activity for high-volatility stocks such as Citigroup (C - Get Report), Bank of America (BAC - Get Report), General Electric (GE) and AIG (AIG - Get Report). Including Wells Fargo (WFC), the list makes up the five most active stocks on the New York Stock Exchange so far this year. Citigroup alone saw nearly 18.5 billion shares change hands year-to-date as of Oct. 31, according to data from the NYSE.

In August, typically the slowest month of the year, retail trading volumes of these five stocks represented roughly one-third of the total trading volume on the Big Board for the entire month as active investors jumped in and out of positions.That number has since fallen to about 16%, according to Sandler O'Neill's Rich Repetto.

The heavy trading in these names came amid the broader market rebound as the Dow Jones Industrial Average has risen roughly 60% from its low of 6,547.05 on March 9.
1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AMTD $28.80 -0.04%
AIG $54.82 -0.06%
BAC $14.05 -0.57%
C $44.22 -0.99%
ETFC $24.94 0.32%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs