TradeStation, the online brokerage owned by Japan's Monex Group, Inc. (MNXBF), saw daily average revenue trades (DARTs) increase by double digits in February, despite a stock market correction and uncertainty about what the Federal Reserve will do with interest rates. According to data from Monex, DARTs were 148,929 in February, up 27.7% from January, when DARTs came in at 116,645. On a year-over-year basis, DARTs jumped 49.5% from the level of 99,588 seen in February 2017.
DARTs provide a way to measure the performance of a brokerage because they show investors' willingness to invest in stocks. While an increase in daily trades would seem counterintuitive given the sell-off in stocks last month, TradeStation has a lot of active traders who probably stayed in the markets to capitalize on the bloodletting. On a year-over-year basis, TradeStation saw active accounts increase 17.3% in February to 73,024.
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TradeStation's strong showing in February when it comes to daily trades differs from rival TD Ameritrade, which saw a decline in trading last month. TD Ameritrade Holding Corporation (AMTD) reported earlier this week that the Investor Movement Index (IMX) – a proprietary, behavior-based index created by the company to gauge what investors are actually doing – came in at 5.95 in February. That compares with a level of 7.79 in January, marking a 23% decline from the month earlier, with February characterized by increased volatility that lowered the IMX to levels it hasn't seen since January of last year.
"After the amazingly quiet 2017, we saw 2018 start with some volatility," said JJ Kinahan, chief market strategist at the Omaha, Nebraska-based discount brokerage, in a press release announcing the results. "It appears that TD Ameritrade clients decided to significantly limit their volatility risk in the market, changing their game plan from less speculative to more of a low beta weighted one."
With self-directed, low-cost investing still in vogue, TradeStation has been expanding its access to make sure it is wherever its customers are trading. Most recently, it began enabling traders to ask Apple Inc.'s (AAPL) Siri for information about their investments' performances and to receive updates on balances in their accounts with the latest version of the company's mobile app for iOS. Siri integration dovetails with TradeStation's plans to roll out an artificial intelligence-based chatbot that will aid traders in finding new investment opportunities and at the same time keep them abreast of the markets. The chatbot will enable traders on the TradeStation platform get the price of stocks, ETFs and futures, and it will be able to research a trading idea and offer up trading suggestions.