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Investors liked what they saw from TD Ameritrade (AMTD) - Get TD Ameritrade Holding Corporation Report .

Shares of the financial services provider have outperformed the S&P 500 over the past month following better than expected fiscal third quarter earnings. TD Ameritrade's bottom line came in at 44 cents a share, above Wall Street estimates for 41 cents a share, despite lower trading commissions. The company was boosted by new account growth and asset-based revenue -- total revenue rose 11% from the prior year to $931 million, eclipsing forecasts for $899.5 million. 

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TheStreet talked with TD Ameritrade CEO Tim Hockey about the quarter and overall trading environment. What follows is a condensed and edited version of our conversation.

Question: The Scottrade acquisition closes soon - do you anticipate a need to get even larger?

A: The closing is still on track: We said Sept. 30, and we're hoping to advance that by a month or so. We literally only have the Federal Reserve and the Canadian bank regulator left to opine. In terms of additional M&A, we've got pretty enormous scale post Scottrade, over $1 trillion in assets and over 10 million in client accounts. Scale used to be an incredibly important thing in any business, but my general philosophy is that scale past a certain size tends to be less important than it used to be: A) because it drives you to be slower just because you're a larger firm and speed is very important, and B) because smaller players can now almost mimic scale at a very early stage in their development.

The examples everybody likes to talk about are Airbnb having more hotel rooms and actually not having a hotel at all and Uber being [one of the world's largest car companies] yet they don't actually have any cars. These are companies that have [amassed] global scale very quickly. To me, speed in the last number of years has become more important than sheer scale once you get past a certain size, and we've passed that size.

Q: We are seeing such a strong appetite by investors for top tech names. How much is interest in tech stocks fueling Ameritrade?

A: Clearly, the traditional FANG (Facebook (FB) - Get Meta Platforms Inc. Class A Report , Apple (AAPL) - Get Apple Inc. Report , Netflix (NFLX) - Get Netflix, Inc. Report and Google (GOOGL) - Get Alphabet Inc. Class A Report ) stocks are the ones that drive retail. We had a broader retail engagement, and retail clients, as you know, tend to trade those things that they know. They trade the brands that they know -- they trade Netflix (NFLX) - Get Netflix, Inc. Report , they trade Amazon (AMZN) - Get, Inc. Report , Nvidia (NVDA) - Get NVIDIA Corporation Report was a big trader this particular quarter.

These are all brands, consumer brands that, notably, our millennial and active traders like to talk about because they know them.

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Q: Your average trades per day surged to about 510,000 despite trading declines at some of the big Wall Street firms amid lower volatility. How did you pull that off?

A: It's a bit of a conundrum. If you look at how the numbers were mathematically generated, there was an uptick in net new accounts generated this [fiscal] year, and literally, in the first three quarters, we did more than we did in all of last year. That then led to a total of about 6% growth in the actual number of accounts, and on average, those accounts traded a little more than they did last year. It was the combination of those three trailing factors that we were up 10% year-over-year.

With a 30% reduction in [online stock and ETF trade commissions, from $9.99 to $6.95 in March], the impact was offset by larger account numbers times more trades, which means that it literally was only a one-cent year-over-year impact on commission revenue.

I wouldn't have thought lower pricing would drive more trading because we didn't think the pricing sensitivity of retail clients at these low levels was such that a lower price drives more activity, but there might be a factor in that.

Brian Sozzi contributed to this story.

Facebook, Apple, and Alphabet are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells FB, AAPL and GOOGL? Learn more now.

Editor's Pick: Originally published July 18.

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