There are a few reasons to get excited about the discount brokerage industry. For starters, the sector has been going through a massive wave of consolidation. E*Trade (NYSE:ET) has come to terms with BrownCo and Harrisdirect in deals worth $1.6 billion and $700 million, respectively. Ameritrade (NASDAQ:AMTD) was able to fend off E*Trade to walk away with Toronto Dominion's (NYSE:TD) huge TD Waterhouse division over the summer.
However, all of these deals wouldn't mean much if folks just weren't interested in trading. Well, guess what? You and I have been trading. This morning, E*Trade and Ameritrade announced healthy gains in trading volume for the month of October. E*Trade reported a 16% uptick in trades at the retail level over September and an even more impressive 48% spurt over last October's showing. Ameritrade's daily average revenue trades also inched higher.
That's not the only thing working in the discount brokerage's favor. At E*Trade, average margin debt has soared 44% since September. Yes, that may be a worrisome sign that traders are feeling more speculative in the market these days, but it's great news for brokers who stand to collect the chunkier margin interest payments.
What? You're hungry for one more catalyst to get you digging into that due diligence before buying into leading discounters like Schwab (NYSE:SCH), Ameritrade, and E*Trade? Well, consider that we are now heading into the months of November, December, and January -- months that have been historically bullish. Obviously, there are no guarantees in the market, but if a friendly market lures even more investors to the stock market -- and those with active accounts get even more active -- all of this momentum could lead to great results over the next quarter.
So let's say that you're intrigued about the market. The wave of consolidation has you scouring the sponsored broker comparison table in our Discount Broker Center to see if you find the bargain-minded brokerage outfit that's right for you. Why wouldn't shares in a discount broker -- perhaps even your discount broker -- be an ideal addition to your portfolio?
Think it over. Your next great growth stock may be the name on top of your monthly brokerage statement.
Schwab is a recommendation of Motley Fool Stock Advisor. If you're looking for great stocks at great prices, let Fool co-founders Tom and David Gardner be your guides with a free trial subscription to the market-beating newsletter service.
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 Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
