Trading volumes ease at TradeStation, but it won more clients

Trading activity at TradeStation Group lost momentum in January 2022 with volumes easing on a year-on year basis following strong gains in the previous year.

According to the investor update published by Monex Group’s subsidiary, the number of daily average revenue trades (DARTs), a standard industry metric, were 239,227 last month. This figure was 12.4% lower than January 2022, a sign that trades continue to meaningfully deaccelerate despite the pandemic volatility over the winter.

TradeStation, however, had won more clients in January, having added 21,052 gross new accounts, up 218.2% than the prior year. This had propelled its active accounts base up to 195,969, 44.7% higher than it was in January 2021.

The company’s total client assets were around $11.5 billion (up 17% YoY), while their cash balances grew to $3.0 billion (up 6% YoY).

TradeStation has recently reported its results for the fiscal third 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 posts mixed financial results

TradeStation was able to amass a total revenue of $53.9 million. This figure was up 1.8% over the three months ended December 31, 2020, and also grew by 6.9% 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% 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% from December 2020, and up 9.9% from September 2021. The broker added 27,412 new accounts during the last three months, up by 81.0% 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.

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.