Squeezed Out On Datek, E*Trade Picks Up Tradescape

E*Trade

(ET) - Get Report

, an also-ran in the bidding war for

Datek

, said it will exchange stock worth $100 million for online brokerage Tradescape, improving its product offerings to high-volume, high-speed traders.

E*Trade said it will exchange up to an additional $180 million in stock if various performance goals are met. The company also agreed to acquire technology uses in its Power E*Trade Pro product for $5 million in stock from

A.B. Watley

(ABWGE)

.

E*Trade said the Tradescape acquisition will give it an additional 100,000 trades per day, bringing its overall transactions per day to more than 200,000, as well as access to a highly touted trading technology that is known for its speed. The acquisition doesn't include MarketXT, an electronic communication network that was owned by Tradescape.

E*Trade was assumed to be on the prowl for acquisitions after losing out on Datek to rival

Ameritrade

(AMTD) - Get Report

, which agreed to buy the online brokerage last weekend for $1.3 billion. The major online trading players, which also number

Schwab

(SCH)

, have been trying to make up for their dismal volume numbers by buying accounts hand over fist in the last several months.

E*Trade expects the acquisition to be modestly accretive to 2002 earnings although it left its guidance unchanged, and to improve 2003 earnings by 10%. It expects to close the transaction in the third quarter.