That's not a noose around E*Trade's (NASDAQ:ETFC) neck. It's a life preserver.

The online brokerage giant is selling its troublesome asset-based securities portfolio to Citadel Investment Group for $800 million. Sure, E*Trade is getting just pennies on the dollar for its $3 billion loan portfolio, but it's found money for an albatross that was getting in the way of the company's thriving retail brokerage business.

Loaded with yucky collateralized debt obligations and second-lien securities, the market feared that future portfolio writedowns would send the company spiraling toward bankruptcy. In that sense, getting $800 million for something that cynics were perceiving as less than worthless is a bonus.

Citadel isn't stopping there, though. It will be tossing another $1.6 billion to $1.75 billion at the company in exchange for common stock and senior unsecured notes yielding 12.5%. In sum, we're talking about a total cash infusion of as much as $2.55 billion.

For those scoring at home, that is more than the company's entire market cap.

It's also time to play musical chairs in the boardroom, with both a new CEO and a new chairman of the board coming in.

This should silence the buyout buzz that had been circulating at the company. Rivals TD AMERITRADE (NASDAQ:AMTD) and Charles Schwab (NASDAQ:SCHW) were starting to circle around like vultures.

And why not? As of Oct. 31, the company's brokerage unit watches over 4.7 million accounts with $227 billion in collective assets under management. Those numbers have since decreased, thanks to the shakeup. But drooling brokers figured they could snatch up the company's retail brokerage business at a fire-sale price. That won't be necessary now that E*Trade completed a fire sale on its peskier asset-based securities business.

This doesn't mean that we won't one day see E*AmeriSchwab. Consolidation is bound to continue in what remains a fragmented sector. Publicly traded trade specialists like Interactive Brokers (NASDAQ:IBKR), TradeStation (NASDAQ:TRAD), Investools (NASDAQ:SWIM), and optionsXpress (NASDAQ:OXPS) have every incentive to scoop up desperate peers.

So don't toss E*Trade into the prey pit just yet. It may still wind up as someone's trophy wife, but it won't have to moonlight as a panhandler during any potential negotiations.

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Longtime Fool contributor Rick Munarriz believes in self-service gasoline pumps and self-service stock brokerages. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.