Securities Firms News
Mon, 22 Jun 1998, 7:08pm EDT
BN 6/22 Schwab Says Its Online Trading Volume Reaches $2 Billion a Week
Schwab Says Its Online Trading Volume Reaches $2 Billion a Week
San Francisco, June 22 (Bloomberg) -- Charles Schwab Corp.,
the largest U.S. discount broker, said its customers trade
more than $2 billion of securities on its Internet site each
week, a measure of the growing popularity of computer-based
brokerage.
San Francisco-based Schwab said it carried out $26 billion
in trades in the first quarter of the year. This is the first
time the firm has disclosed its online trading volume, though it
regularly releases information about number and total assets of
its electronic brokerage accounts. At the end of May, the firm
had 1.74 million active electronic accounts with about $120
billion in assets, more than double the online accounts and
assets it had a year earlier.
Higher electronic transaction volume is critical for
Schwab's profits. The $29.95 fee it charges for online trades is
significantly below its commission on other trading channels. As
customers do more trading on line, Schwab needs to offset lower
commissions with a larger number of trades to keep revenue
growing.
''For a while they were losing market share in online
brokerage,'' said Deutsche Bank Securities analyst Bill Burnham.
''They've come on strong since they cut prices in December.''
Schwab has about a 32 percent share of the online trading
market as measured by average daily trades, more than twice the
share of second-ranking E*trade Group Inc., according to
estimates by Piper Jaffray Inc.
--Sam Zuckerman in the San Francisco newsroom (415) 912-2992 through the New York newsroom/csc
--------------------------------------------------------------------------------
c Copyright 1998, Bloomberg L.P. All Rights Reserved.
|
