| 17 March 2010

E*TRADE Financial Corporation (ETFC) checked in with February 2010 business metrics today and the first thing we notice is that their trading activity is off 20% versus January. We've seen all brokers take a hit on trading in February -- from Schwab's (SCHW) 14% dip on the low end to TD Ameritrade at 18%.

This makes E*TRADE's 20% dip in trading just slightly above the norm, but not by much. So it appears no broker is immune to the drop in activity which we believe is due, at least in part, to a rocky market during the last two weeks of January and into early February, which may have sent some investors to the sidelines.

This week we debut a new set of charts designed to track the key performance metrics of each broker over the last year. The idea is to give a broader view to the performance -- as opposed to, say, just month-over-month or year-over-year comparisons. Since this is a new effort your any comments or suggestions are encouraged.

It might also be useful to compare these charts with the set of charts we just published on optionsXpress (OXPS).

First we take a look at E*TRADE's trading activity. While we've seen Daily Average Revenue Trades fluctuate among the brokers, E*TRADE's trend is clearly downward. (We are only tracking U.S. trades, so the recent sale of foreign accounts shouldn't factor into this activity.) The firm is currently running well below its 12-month average.



Net new accounts for the firm have also been on a significant downward trend of late. Notice that this chart dips well into the negative. We believe the recent positive upswing is due to the large amount of advertising spend recently, especially during the Super Bowl. We will also track advertising spend, which should correlate with new account growth. But those numbers are only released on a quarterly basis.



Finally, we look at the growth in customer assets, which is consistent with what we've seen from other brokers. The trend is positive and is highly correlated to the markets.



We always recommend you compare this performance with the performance of the S&P 500 as we've found the two to be highly correlated, all other things being equal. Any significant delta from the overall performance of the market can possibly point to more interesting positive or negative performance as compared with other brokers in the space.

Source: company press releases.