Bob, another thought about AMTD along the lines of the impressive account growth. They are quick to say that account attrition was only 6,000. I assume these accounts were "closed". But where do they factor in accounts which have had significant assets removed or trading activity moved to another broker?
For instance, we know from the press release that they averaged about 32,000 trades a day from a base of around 350,000 accounts. So IF:
we group the accounts into 3 trader categories (Daily, Weekly, Monthly,). Try to make some assumptions and add up where the daily trades might come from.
1 trade a Month(280,000 accounts/20 trading days)= 14,000 daily trades.
1 trade a Week (60,000 accounts/5 trading days)= 12,000 daily trades.
1 trade a Day (6,000 accounts * 1)= 6,000 daily trades
Well thats a total of 32,000 daily trades. So from those assumptions, the significance of losing 6,000 accounts depends greatly on which category they were lost from. If they were all daytraders leaving because the lack of service was killing them, then there went 20% of the business.
And it would take 60,000 new accounts on the average to replace the lost ones. Assuming that no new knowledgeable daytraders would sign on. |
