Magazine article American Banker

On-Line Trades Jump 44%, with Schwab and E-Trade Leading the Hot Market

Magazine article American Banker

On-Line Trades Jump 44%, with Schwab and E-Trade Leading the Hot Market

Article excerpt

On-line trading volumes have grown 44% in the last six months, to 137,978 per day, according to a report by Piper Jaffray Inc. senior analyst Bill Burnham.

"The firms are generating tremendous volumes, are coming of age, and are getting respect from the financial services industry," said Mr. Burnham. "I think the most significant development is that on-line trading is rapidly becoming an important part of the capital markets."

Though the top five providers of on-line brokerage control 74% of the market, Mr. Burnham said, "there is a big pot of honey and lots of bees."

The one significant change in the pecking order was E-Trade Group's displacing of Fidelity Investments in the No. 2 slot. E-Trade's 15% share trailed only Charles Schwab & Co.'s 33%.

To date in 1997 E-Trade's account total has doubled to 225,000, and its daily trade volume, including those initiated by telephone, has grown by 124%, to 24,096.

A newcomer, privately held Datek Securities, jumped into fourth place with 10,000 trades a day in the third quarter. DLJ Direct is in fifth place; it has 370,000 accounts and about 7,800 trades a day.

By the end of 1998, Mr. Burnham said six of the top 10 U.S. banks and several top insurers would offer some form of on-line trading.

"There are a number of banks and insurers planning launches of their own, and the potential for acquisitions is a real possibility," he said.

Recent bank acquisitions of brokerages include Fleet Financial Group's purchase of Quick & Reilly and Mellon Bank Corp. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.