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Friday, September 08, 2006

TD Ameritrade See Trading Drop

Stocks: (AMTD)(SCHW)(MER)(WB)

In news that may not be terribly good for Schwab, Merrill Lynch, and other brokers that cater to individuals, TD Ameritrade's average client trades a day dropped from 210,000 in July to 196,000 in August. Of course, some of this could be due to slower summer trading during the nation's biggest vacation month.

It does appear to signal that individual investor trading volume is not longer going up. In August of last year, TD Ameritrade volume was 146,000 shares a day, so the early part of this year appears to be a high water mark.

With markets in peril and some stocks down 50%, it should not be a surprise that investors would move to cash or into mutual funds. Many may feel that they need a safter harbor for the time being.

It is, though, surely not good news for the stocks of discount brokers and companies that have large full-service operations like Wachovia. If the markets get worse, so could the earnings.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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