E-Trade experiences record trading in the second quarter as the retail trading boom continues

Pedestrians walk outside an E*Trade Financial office in New York, U.S.

Daniel Acker | Bloomberg | Getty Images

E-Trade’s trading activity and new accounts surged in the second quarter amid a boom in retail investing that started during the coronavirus market turmoil. 

The broker — slated to be acquired by Morgan Stanley in the second half of 2020 — reported Thursday a record 1.01 million daily active revenue trades in the second quarter, a 267% increase from its daily trades last year. This is up from 657,000 daily trades in the first quarter. 

The major online brokers — Charles Schwab, TD Ameritrade, E-Trade and Robinhood — have seen new accounts and trading activity surge this year during the coronavirus recession. The brokerage industry experienced a retail gold rush as small investors saw the market rout and subsequent rebound as an opportunity. 

After adding a record 329,000 new accounts in the first quarter, E-Trade added 327,00 new retail accounts in the second quarter. The broker added just 34,00 new accounts in the second quarter a year ago. 

The rapid growth for the broker brings its year-to-date retail asset flows to $31.9 billion and account growth to 656,000. 

“We generated greater retail organic asset growth in the first half of this year alone than in the previous two years combined, and generated more retail organic account growth than the previous five years combined,” E-Trade CEO Mike Pizzi said in a company release. 

Since last week, Charles Schwab, TD Ameritrade and Interactive Brokers reported similar surges in trading activity and new accounts in the second quarter. 

E-Trade also beat on the top and bottom lines of its second quarter earnings. The broker earned 88 cents per share on revenue of $716 million. Wall Street expected earnings of 76 cents per share on revenue of $676 million, according to Refinitiv.

“We generated our highest period ever of revenue from trading-related activity, which more than offset the quarter-over-quarter pressure on net interest income, given the Fed’s recent rate cuts to near zero,” E-Trade CFO Chad Turner said in the release. 

Shares of E-Trade ticked slightly lower in extended trading on Thursday. 

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