TradeStation banks on active traders to fight downturn
August 15th, 2008 | by admin |By Ratul Ray Chaudhuri
BANGALORE (Reuters) - Online broker TradeStation Group Inc (TRAD.O: Quote, Profile, Research, Stock Buzz) believes its focus on active traders should help it weather the downturn in financial markets, even if some retail traders take a backseat due to the slowing economy, its chief executive said.
“It is possible that some retail traders that are not as active could potentially go to the sidelines. But historically our traders have traded in good times and in bad times,” TradeStation CEO Salomon Sredni said in an interview. Active traders include people who trade for a living.
Brokers like TradeStation, which are dependent mostly on transaction revenue, have managed to steer clear of many of the problems facing other financial companies, as volatility in the markets have driven trading volume.
Helped by a turbulent financial market in U.S., brokers have seen their revenue and Daily Average Revenue Trades — a key measure of trading activity for retail brokerage firms — soar with higher and more commission flowing in.
“In periods that have seen high volatility we delivered some very good numbers from a revenue perspective,” Sredni said.
During the first quarter DARTs rose 56 percent to 109,219 and in the second quarter they rose 28 percent to 91,121.
LOOKS TO REMAIN ONLINE
“We are very comfortable with just having an online footprint,” CEO Sredni said when asked whether the company is looking to have physical branch networks to offer greater personal assistance to its traders.
