TradeStation’s fee-generating trades drop 15pct YoY

Monex Group’s US subsidiary, TradeStation has reported mixed trading volumes for February 2022 even as political events globally maintained investors’ interest in financial markets.

According to the investor update published by the company, the number of daily average revenue trades (DARTs), a standard industry metric, were 242,846 last month. This figure was -16  percent lower from a year earlier, a sign that trades continue to meaningfully deaccelerate despite volatility triggered by Russia’s full-scale invasion of Ukraine.

However, trading activity at TradeStation Group slightly rebounded on a month-over-month basis when compared to 239,227 transactions booked in January 2022.

TradeStation had won more clients in February, having added 19,750 gross new accounts, up 85 percent than the prior year. This had propelled its active accounts base up to 209,291, up 50 percent from it was in February 2021.

The company’s total client assets were around $11.6 billion (up 15 percent YoY), while their cash balances grew to $2.9 billion (up 3.2 percent YoY).

TradeStation Securities, the US broker-dealer arm of Japanese financial services giant Monex Group, said in November it will go public through a merger with a blank-check firm in a deal that values the combined entity at $1.43 billion.

TradeStation posts mixed financial results

TradeStation has recently reported its results for the fiscal quarter ending December 31, 2021, which showed a positive performance in terms of revenue growth. However, the multi-asset brokerage company posted worse-than-expected net income triggered by higher marketing expenses.

TradeStation was able to amass a total revenue of $53.9 million. This figure was up 1.8 percent over the three months ended December 31, 2020, and also grew by 6.9 percent as compared to the prior quarter.

Taking a year-to-date perspective, TradeStation had net revenues of $157.0 million for the April-December period, a 2.2 percent increase over the 2020 nine-month period.

TradeStation attributed the revenue growth to higher trading-related revenue and net interest income. However, this growth was partially offset by lower average trading-related revenue per account coupled with lower subscription fees and other revenue.

As per the report, TradeStation had 178,863 customer accounts, an increase of 36.1 percent from December 2020, and up 9.9 percent from September 2021. The broker added 27,412 new accounts during the last three months, up by 81.0 percent from 15,147 a year earlier.

Despite the bullish operational metrics, the company posted a net loss of $11.3 million and negative adjusted EBITDA of $13.6 million. That compares to a profit of $2.1 million and adjusted EBITDA of $12.4 million for the prior-year’s three months. Year-to-date, the company had a net loss of $16.9 million after it earned $4.5 million in the previous year.