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Old 01-26-2012, 02:11 PM
 
Location: Middleburg
906 posts, read 1,629,150 times
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I'm confused about something. Why does eTrade (ETFC) always lose money while TD Ameritrade (AMTD) has very consistent profits? Aren't they in the exact same business?
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Old 01-26-2012, 03:06 PM
 
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Compare Online Stock Brokers - Discount Broker Comparison Chart

they have different fees, etc.

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corporate profits involve many factors.

ETFC Key Statistics | E*TRADE Financial Corporation Stock - Yahoo! Finance
Etrade has 1.39B in revenues and earns 51 cents a share on 255 million shares.

AMTD Key Statistics | TD Ameritrade Holding Corporati Stock - Yahoo! Finance
TD has 2.73B in revenues and earn 1.13 on 233 million shares.

One may have a different tax rate that the other, higher debt, dividends to pay, lower commissions, less customers, etc.

It is not hard to create a competitor. Trade King is a recent start up I think, and they take customers away from the others. Maybe by offering lower cost. Such firms might take more customers away from Etrade than they do from TD. Etrade only requires $500 to open an account.
So, no offense to any Etrade account holders, but it is not hard to become an Etrade customer. TD has a "different" class of customers with their accounts requiring larger deposits ($2000). They may offer more services and they keep more customers from switching to someone else.

Etrade will be taken over by someone at some time.
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Old 01-26-2012, 03:16 PM
 
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TD appears to offer IRA's and Etrade does not.
TD is closer, than Etrade, to being a full service broker like Charles Schwab.
Schwab offers online commissions, etc. but if you want a home loan Schwab offers that too.
If you want to buy foreign stocks or penny stocks on the pink sheets, or speak to their international trade desk, Schwab has it.
TD Ameritrade may offer some of that too, whereas Etrade may not.
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Old 01-26-2012, 04:35 PM
 
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Quote:
Originally Posted by howard555 View Post
TD appears to offer IRA's and Etrade does not.
TD is closer, than Etrade, to being a full service broker like Charles Schwab.
Schwab offers online commissions, etc. but if you want a home loan Schwab offers that too.
If you want to buy foreign stocks or penny stocks on the pink sheets, or speak to their international trade desk, Schwab has it.
TD Ameritrade may offer some of that too, whereas Etrade may not.
Etrade does offer IRA

Etrade also let you buy foreign stocks

I have both Schwab and Etrade. I am not sure about service etc.
But Etrade's interface is far superior than Schwab's. Schwab UI looks like a class assignment of a web development training from one of those training institutes.
But nevertheless, you have all the options and nuts available to trade

Sorry, I don't know about TD ameritrade
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Old 01-26-2012, 07:52 PM
 
Location: Middleburg
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Quote:
Originally Posted by howard555 View Post
One may have a different tax rate than the other, higher debt, dividends to pay, lower commissions, less customers, etc.
Thanks for these suggestions. When I looked at the income statements, I saw that eTrade has substantial "interest expense" payments whereas TD Ameritrade has almost no interest expenses. That appears to be the difference as to why they are at polar opposites of profitability.

So not only is TD Ameritrade extremely user friendly, but they also have a superior corporate structure that isn't weighed down by debt like eTrade is.
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Old 01-26-2012, 08:12 PM
 
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Originally Posted by MountainMen View Post
Thanks for these suggestions. When I looked at the income statements, I saw that eTrade has substantial "interest expense" payments whereas TD Ameritrade has almost no interest expenses. That appears to be the difference as to why they are at polar opposites of profitability.

So not only is TD Ameritrade extremely user friendly, but they also have a superior corporate structure that isn't weighed down by debt like eTrade is.
Skimmed through news articles about their annual report and it looks like got hurt from bad bet loans they made on US real estate.
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Old 01-26-2012, 09:29 PM
 
Location: Middleburg
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Quote:
Originally Posted by gichicago View Post
Skimmed through news articles about their annual report and it looks like got hurt from bad bet loans they made on US real estate.
eTrade did? I know Schwab financed mortgages, but I didn't think eTrade did.
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Old 01-27-2012, 05:12 PM
 
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Originally Posted by TechRider View Post


But Etrade's interface is far superior than Schwab's.
So their Street Smart Pro and Street Smart Edge, trading software is second grade?
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Old 01-27-2012, 08:13 PM
 
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At the peak of the housing boom, ETrade got into the mortgage origination business. They wanted to become a complete personal financial services provider (investments, deposits, loans). They'll be paying for that mistake for many more years, as they have a lot of bad loans on their books that haven't been written off. (That's why their stock plummeted in 2007-08.)

TDA is among the more financially conservative brokers out there. They don't have substantial leverage. I think Schwab is fairly leveraged, last I looked at their SEC filing

However, my TDA account has occasional mistakes with the accounting (sometimes my balance is incorrect). They fix the problem quickly each time but it's pissing me off that it even happens in the first place
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Old 01-27-2012, 09:58 PM
 
Location: Middleburg
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Wow, good info. I never realized eTrade got involved in bad mortgages. I was going to sell my ETFC shares anyway, but now I will for sure. I'll probably pick up some AMTD with the proceeds. Thanks.
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