Discount brokerage houses shouldn't have it as easy as Ameritrade (NASDAQ:AMTD). We've had trading lulls, freefalling commission schedules, and the digestion process that accompanies most sectors in buyout binges. However, yesterday Ameritrade wrapped up its third straight record year. Earnings rose by 27% to hit $0.81 per share as revenue hit $1 billion.

If the company's aim is true, in another 12 months we'll be discussing Ameritrade's fourth consecutive year of record results. It expects to earn between $0.83 and $1.02 a share in fiscal 2006.

Over the past year, investors have associated the trading trade with an insatiable appetite to gobble up the competition. E*Trade (NYSE:ET) recently announced a $1.6 billion deal to acquire BrownCo after serving up a $700 million nibble for Harrisdirect. Ameritrade agreed to buy Toronto Dominion's (NYSE:TD) TD Waterhouse division over the summer.

After E*Trade's recent buyout proposal, I wondered whether we were soon approaching the sad day when the broker comparison table in our active Discount Broker Center would run just one column long. This has customarily been a highly fragmented sector, but many of these recent deals have snapped up the industry's heavy hitters in discounted stock trades.

It almost leaves one to wonder what Motley Fool Stock Advisor pick Charles Schwab (NYSE:SCH) will do, as E*Trade and Ameritrade continue to grow by absorbing many of its rivals. Long before the Internet was cool, I was one of Schwab's first online customers, trading stock in the early 1990s through a specially designed interface on General Electric's (NYSE:GE) long-defunct GEnie service.

I eventually heeded the call of lower trading fees elsewhere, but I always wondered how Schwab had pioneered online trading only to let its dot-com mindshare drift over to discounters like E*Trade and Ameritrade.

Then again, if these acquisitions continue, we may be down to just those three companies again before too long, which would probably signal the end of rock-bottom commissions. That would be bad for you and me, but not if we were paying those higher commissions to buy stock in the discount brokers as their fundamentals improved.

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Longtime Fool contributor Rick Munarriz has been trading exclusively through discount brokers since 1990, but he does not own shares in any of the companies in this story. The Fool has a disclosure policy. He is also part of the Rule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.