I was shocked to read the note from Sandler O’Neill Partners Analyst, Richard Repetto, that was discussed in the article "E*Trade, Online Brokers Stumble" by By Michael Baron on the website TheStreet.com. Mr. Repetto stated that the overall DARTs, or daily average revenue trades, for the online brokers for September were tracking 5% below August levels. In fact I believe it is exactly the opposite - at least for E*Trade.
If you remember, on September 14, 2009, E*TRADE published their August 2009 DARTS which came in at 208,495. In that press release E*TRADE also made a statement indicating their DARTS, as of September 1, 2009 to September 11, 2009, to be approximately 200,000. Can you please explain, Mr. Repetto, how you have come to the conclusion that E*TRADE’s DARTS will be flat compared to the month of August? Your note insinuates that from September 14, 2009 to September 30, 2009 there where only 653 trades done in a day. Respectfully, I find your numbers to be completely erroneous.
In fact , I believe E*TRADE will pull in at least 250,000 to 270,000 DARTS. Your analysis gives me the impression that your data and conclusions mainly come from the Charles Schwab DARTS. Charles Schwab’s month to month DARTS this past year does show a steady decrease in customer trading. You may use the graph (page 11) on E*TRADE’s presentation to Barclay's Capital Global Financial Services Conference from September 15, 2009 as a reference.
In conclusion, I believe your numbers are completely wrong and need to be re-calculated.
Disclosure: Long ETFC
E*trade’s Presentation to Barclay’s
E*trades’s August DARTS