Trading the Return of Retail Investors

The return of cash to the market following the great crash of 2008 and early 2009 hasn’t necessarily translated into good things for optionsXpress, an Internet-based broker for retail investors. Not according to the most recent earnings report anyway.

This is a stock Cramer has liked since September of last year, and he reiterated his call a month later, but optionsXpress is down slightly and up just 9 percent from those two recommendations, respectively. At the earnings announcement on Oct. 26, we found out why: lower trading activity levels, competition and reduced profits from margin lending due to low short-term interest rates all cut into the quarterly results.

Granted, the report did hold some positives. There was a better close to the end of the quarter, and management is considering a special dividend. But Cramer needed to hear more from optionsXpress before endorsing the stock again. Were the customers coming back or not? He looked to CEO David Fisher for an answer. Watch the video for the full interview.

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