TD Ameritrade posted record retail trading activity and account growth during 2nd-quarter frenzy

• The stock market's heightened volatility and rally from March lows led TD Ameritrade to see numerous records in the second quarter.
• Daily average revenue trades reached a record 3.4 million, the brokerage said, more than four times its year-ago level and a 62% jump from the prior quarter.
• The firm also added a record 661,000 new accounts over the period as new retail investors flooded the market.
• Other firms similarly benefited from the market's wild upswing. Interactive Brokers on Tuesday reported a 111% increase in daily average revenue trades year-over-year.
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Stocks' strong rally from March lows fueled a surge in retail trading activity and set records for TDAmeritrade in the second quarter.

The brokerage announced quarterly figures on Tuesday afternoon and revealed the extent to which new investors flocked to the market. Daily average revenue trades reached a record 3.4 million, the firm said, more than four times the year-ago reading and a 62% leap from the first quarter. The broker added a record 661,000 new retail accounts over the period as well.

"Zero commissions and sustained volatility drove new and existing client engagement," CEO Steve Boyle said, adding the second quarter included the top 15 trading days by volume in the firm's history.

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TD Ameritrade handily beat earnings expectations on the record trading activity. The brokerage reported earnings per share of $1.09, beating the Wall Street estimate of 85 cents, according to CNBC. Revenue of $1.59 billion beat the $1.41 billion expectation.

Still, TD Ameritrade shares dipped as much as 1.4% before paring losses through the morning.

The numerous records arrive as casual day-trading and retail investing comprise an increasingly large share of market activity. The group made up just 10% of the market in 2019. Yet slashed commission fees and new volatility saw that proportion leap as high as 25% in the first half of 2020, Joe Mecane, head of execution services at Citadel Securities, said in early July.

Other brokerages benefited from the chaotic period. Interactive Brokers reported a surge in retail trading, with daily average revenue trades soaring 111% to 1.75 million. Accounts grew 36% to 876,000. Client equity gained 33% and passed $200 billion for the first time.

"Over the course of the quarter, clients grew more comfortable with putting money into the market and taking on leverage, leading to client trading levels increasing and our margin loan balances recovering," Nancy Stuebe, director of investor relations at Interactive Brokers, said in a call with analysts, according to a transcript provided by Sentieo.

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