RealTime IT News

Report: Online Stock Trades Rise 34% to 340,000 Daily

Online trading companies logged an average of 340,000 stock and mutual fund trades a day in the fourth quarter of 1998, up 34 percent from the second quarter, according to published reports.

Toronto-Dominion Bank's Waterhouse Investor Services had the biggest increase in market share for the second consecutive quarter, according to a report from Credit Suisse First Boston Corp.

Waterhouse passed E*Trade Group Inc. to move into second place, adding 1.9 percentage points to reach 12.4 percent of average daily trades, Bill Burnham, an electronic commerce analyst at Credit Suisse and the report's author, told Bloomberg News.

Charles Schwab Corp., the biggest online brokerage, lost 2.9 percentage points in the quarter, finishing with a 27.4 percent share based on 93,000 daily trades, Burnham was quoted as saying.

E*Trade gained share, adding 0.9 percentage points to reach 11.7 percent. Datek Online Brokerage Services Inc. added 1.6 percentage points to reach a 10 percent share, passing Fidelity Investments to move into the No. 4 spot.

The continued growth in U.S. online trading volume, from a 253,000 daily average in the third quarter, came as investors snapped up Internet stocks, with the Inter@ctive Week index of 50 Internet stocks rising 71 percent during the three months. Burnham's report is said to be a benchmark for the online trading industry,.

"The close correlation between online trading growth and Internet stock volume growth is really not surprising given that online traders are, by definition, Internet users and therefore much more likely to be aware of and interested in Internet stocks," Burnham said. Online trades accounted for almost one in seven U.S. stock trades in the fourth quarter.