TD Ameritrade stock price is down 21.63%

From CNBC this morning for Ameritrade:
Total Revenue from trading commissions: 8%
Total Revenue from interest on accounts: 57%

 

Not as high as I thought. With only 8% of revenue derived from commissions they should have been the first to offer free trading as soon as they saw Robinhood as a threat. They would have probably opened up millions of accounts and made interest on money sitting in accounts . Too late now

 

From https://www.amtd.com/news-and-stori...orts-Record-Fiscal-2018-Earnings/default.aspx

For fiscal year 2018:

Commissions: $1.51B ($7.45*202.8)
Total operating income: $1.89B
Net income: $1.47B

Dropping commissions to 0 is going to HURT.

 

is this merely a reaction to business model switch or could this be interpreted as the top of Levered (levered to historic levels currently) Retail trading which signals a market top?

 

Wow I knew it was bad - but I didn't realise it was that bad.

The 8% figure provided earlier in the thread does not sound accurate.

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Most recent figures for Q3 ended 30 June 2019 here:
https://www.sec.gov/Archives/edgar/data/1173431/000119312519198972/0001193125-19-198972-index.htm (index)
https://www.sec.gov/Archives/edgar/data/1173431/000119312519198972/d780268dex991.htm (PR)

For the quarter:
51.9 million trades * $6.92 avg commission = $359.14 million

For the quarter:
Net revenues $1,491 million

Operating expenses $771 million

Operating income $720 million

For a start, the $359 million is 24% of total revenue.

If we reduce that to zero (and make no changes to anything else, such as higher order routing revenue), then the $359 million commissions is almost exactly half of their quarterly operating income.

 

Etrade ETFC

quarter ended 30 June 2019

Index
https://www.sec.gov/Archives/edgar/data/1015780/000115752319001542/0001157523-19-001542-index.htm
PR
https://www.sec.gov/Archives/edgar/data/1015780/000115752319001542/a52015290ex99_1.htm

Net revenue $685 million
of which commissions are $121 million
121 / 685 = 17.66% of revenue

Operating income $295 million

So commissions are 41% of operating income.

 

Good ole’ competition. I like that.

 

Getting crazy with commissions dropping. With these free amazing platforms and soon to be zero commissions across the board its getting harder to make fat profits.