Markets

Retail investors piling an 'enormous amount' of money into the market: TD Ameritrade CEO

Key Points
  • The rise in investments is fueled by the cryptocurrency and cannabis sectors, TD Ameritrade CEO Tim Hockey says.
  • He says it's been "an amazing ride."
  • People under age 35 make up a large portion of first-time investors, he says.
TD Ameritrade CEO: Markets feeling 'a little frothy'
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TD Ameritrade CEO: Markets feeling 'a little frothy'

More and more retail investors are piling into the market, especially millennials, TD Ameritrade CEO Tim Hockey told CNBC on Thursday.

In January, the e-trader saw an average of 975,000 trades per day.

"There is an enormous amount of new retail money coming into the market," he said in an interview with "Closing Bell." "It's been an amazing ride."

Hockey said the rise in interest is likely a byproduct of the excitement around the emerging cryptocurrency and cannabis markets. But as people start to build portfolios, Hockey said, they will likely venture out into other sectors.

Plus, the rise in volatility has also made people more aware of the possibility for large-scale gains, attracting once-skeptical investors who may have sat out of the nine-year bull market, he added.

"We've had a long-term period of very, very low volatility," Hockey said. "So, you put anything into the mix that creates volatility, you get people focusing your attention," referring to things such as bitcoin.

TD Ameritrade recently beat fourth-quarter earnings and had 726,000 average daily trades during the same period, a 49 percent increase year over year. The popular cryptocurrency and marijuana sectors were up between 7 and 8 percent, compared with 2 percent a year earlier.

To capitalize on the increased interest, the company recently extended its platform trading hours to 24 hours a day, seven days a week for several popular exchange-traded funds.

Still, talk of the market overheating persists. Hockey admitted it is beginning to feel a bit "frothy."

But millennials seem to be the least concerned, as new TD Ameritrade accounts shift toward a younger generation, Hockey said. First-time clients under age 35 jumped 72 percent during the fourth quarter compared with the same time last year, most notably in the tech sector.

"Those are also the types of products they use, so they are making those types of trades," Hockey said.

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