Holy Charles Schwab!! Why are investors flocking to discount brokers?
Tomorrow I'll be at the Sandler O'Neill Global Exchange and Electronic Trading Conference...this is the premier conference for CEOs of global exchanges and brokerage firms.
My guests will include Fred Tomczyk, CEO of TD Ameritrade, Tom Joyce, CEO of Knight Capital, Terry Duffy, Chairman of the Chicago Mercantile Exchange, and Howard Lutnick, Chairman and CEO of Cantor Fitzgerald and BGC Partners.
For retail brokers like Ameritrade, it's been a good few months: to the surprise of many, growth for the discount firms has outpaced the full-service firms.
Why? Because many investors have decided they might do just as well investing on their own!
Retail traders have also been helped by two other factors: 1) the explosion of volatility, and 2) the use of newly-minted Exchange-Traded Funds (ETFs), which allow retail traders to easily move in and out of the markets.
But can Schwab, Ameritrade, Etrade and others they really compete against the full-service giants like Merrill and Smith Barney? We'll ask TD Ameritrade CEO Fred Tomczyk.
As for the Exchanges like the Chicago Mercantile Exchange, they have been at the center of efforts to bring over-the-counter (OTC) deriviatives like credit default swaps onto exchanges, which would greatly reduce the chances of counterparty defaults. We'll get an update from CEO Terry Duffy.