NEW YORK (TheStreet) -- Retail trading at online brokerage firms including TD Ameritrade (AMTD), E*Trade Financial (ETFC), and Charles Schwab (SCHW), surged by double digits during the month of October.
According to channel checks conducted by Rich Repetto, an analyst at Sandler O'Neill & Partners, daily average revenue trades, or DARTs, rose 15%-20% in October vs. the prior month, with retail trading likely outpacing institutional volumes, Repetto estimates in an industry note on Monday.
U.S. cash equity volumes totaled 7.8 billion shares, up 7.7% sequentially but down 16.2% from the year-earlier comparable period, according to Repetto. Share volumes on the NYSE Euronext's (NYX) New York Stock Exchange (Tape A) rose 13%, Tape B (American Stock Exchange and NYSE Arca) rose 3.1%, while Nasdaq (NDAQ) volumes (Tape C) fell 0.4% last month.
According to the note, trading at TD Ameritrade rose 15% sequentially; E*Trade's volumes rose 12.5%; Schwab's retail volume rose 10%; while OptionsXpress (OXPS) retail volumes rose 10%. Interactive Brokers Group (IBKR) and TradeStation Group (TRAD) each experienced a 5% rise in trading, Repetto writes.The rise in trading volumes occurred even as volatility declined for the fifth straight month from its peak in May from the "flash crash." Higher volatility is typically better for equity volumes and trading activity in equity index futures, Repetto writes. Options trading continues to be strong. Options volume rose 13.2% last month to 16.3 million per day, the note said. Futures trading volume for CME Group (CME) fell 5.4% sequentially to 11.4 million contracts. The decrease was fueled by soft interest rate and equity contract activity, the note said. Futures trading volume on the Intercontinental Exchange (ICE) also fell 12%, Repetto estimates. Online brokers have experienced a general decline in retail equity trading this year, through the combination of lower volatility compared with last year's uncertain market conditions, but also as some investors, skittish from the market woes of the last few years exacerbated by the "flash crash" continue to park cash on the sidelines. Online Brokerages Want Money on Sidelines TD Ameritrade shares were trading flat at $17.08 around 12:30. E*Trade and Schwab shares were each rising 0.6% to $14.38 and $15.50, respectively.
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