Bloomberg News
April 26, 1999, 7:40 a.m. PT
Online Trades Up 49% to Almost 500,000/Day, Piper Jaffray Says
Minneapolis, April 26 (Bloomberg) -- Online stock trading
rose 49 percent during the first quarter as investors opened 1.2
million accounts and made an average of 496,074 transactions a
day, said U.S. Bancorp Piper Jaffray.
E*Trade Group Inc., which saw customer trades rise 65
percent to 65,800 daily, regained the No. 2 industry ranking it
lost last quarter to Toronto-Dominion Bank's Waterhouse Investor
Services, Piper Jaffray said. Charles Schwab Corp. remained No. 1
with a 27.9 percent share of trades.
Trades rose 88 percent in six months, and more than doubled
in nine months, Piper Jaffray said. Total industry accounts rose
17 percent during the first quarter 8.49 million, and assets rose
24 percent to $523 billion.
''The numbers are phenomenal,'' said Steve Franco,
electronic commerce analyst with Piper Jaffray and the report's
author. ''They show that online brokerage is not just a segment
of the discount brokerage industry: it's going to be the way
retail investors expect delivery of financial services.''
Piper Jaffray has been tracking online trading statistics
for two years, and its reports, along with those compiled by
Credit Suisse First Boston, are regularly cited by industry
executives.
Separately, E*Trade said it's now signed up 1 million
members for its free Destination E*Trade Web site, which offers
research, mortgage and insurance information. E*Trade hopes those
members will later become revenue-producing trading customers,
adding to its 909,000 accounts at March 31.
E*Trade rose 13 15/16, or 13.4 percent, in midmorning
trading to 118. On Friday the company said it will split its
stock 2-for-1 next month.
Also rising were Schwab, up 4 1/4 to 124 15/16, and
Ameritrade Holding Corp., the No. 6 brokerage, up 9 1/4 to 136
1/4. Donaldson Lufkin & Jenrette Inc., which owns No. 7 online
broker DLJ Direct, rose 2 5/8 to 79. Knight/Trimark Group Inc.,
which executes trades for Ameritrade and E*Trade, rose 5 5/8 to
122 9/16. National Discount Brokers Group Inc. rose 4 7/16 to 59
15/16.
''Destination E*Trade has gained a lot of traction,'' said
Franco. ''They've also been winning back some hyperactive traders
they had been losing to the Dateks of the world.''
Closely held Datek Online Holdings Corp. the No. 4 online
broker, saw trades rise 49 percent during the quarter.
In the top 10 rankings, the ''gap has widened'' between the
six biggest brokers and the next four, said Franco. Six months
ago Ameritrade's market share was 6.9 percent to 4.3 percent for
DLJ. That gap is now 8.3 percent to 3.8 percent, he said.
The average account holder made 3.76 trades per quarter, up
22 percent, Franco said. The average new account cost $187 in
advertising and marketing, down from $205 in the third quarter of
1998.
Top 10 Online Brokers in the 1st Qtr
Broker Average Daily Trades Market Share
Charles Schwab 138,250 27.9%
E*Trade 65,800 13.3%
Waterhouse 57,800 11.7%
Datek 50,345 10.1%
Fidelity 49,981 10.1%
Ameritrade 41,252 8.3%
DLJ Direct 19,062 3.8%
Discover 13,838 2.8%
Suretrade 11,000 2.2%
NDB 6,580 1.3%
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