It was a wild trading day for online discount broker E*Trade (NYSE:ETFC). Shares -- already cut nearly in half since peaking in June -- traded as much as 29% lower yesterday, before making most of that back in the last three hours of trading.

E*Trade closed at $13.55 yesterday, 3% lower than it did on Wednesday, but nicely higher than the single digits it was hitting earlier in the day.

What gives here? Like the sturdier TD AMERITRADE (NASDAQ:AMTD) and Charles Schwab (NASDAQ:SCHW), E*Trade is a leader in providing deep-discount brokerage services. The company is also a diversified financial-services provider, offering banking customers high-yielding savings accounts, interest-bearing checking accounts, and mortga --

Oh, snap! E*Trade originates mortgages? After watching the subprime mess wash out riskier lenders before sending higher-quality providers like Countrywide (NYSE:CFC) into frenetic drawdowns, it's no wonder investors are concerned about E*Trade's mortgage and home equity loans.

E*Trade had yet to issue a public warning about its loan portfolio, but the silence was deafening.

"In our view, what management is not saying speaks louder than what it is saying," warned Citigroup analyst Prashant Bhatia.

So if there's any upside to yesterday's volatile trading day, it's that it finally got E*Trade to publicly address the market's concerns. In a press release issued after the market closed, the company updated investors on the state of its loan portfolio.

  • Its $15.7 billion in first-lien mortgages is backed by private mortgage insurance for homeowners who have yet to pay down their loans below 80% of the loan value.
  • 74% of its home equity line customers have FICO scores of at least 700.
  • 99% of its mortgage-backed securities are rated AAA.
  • It still has $10 billion in excess wholesale borrowing capacity.

The highlights are comforting, though no one thinks that we've hit rock-bottom just yet. The welcome news won't catapult the stock back through two bitter months of losses, but perhaps it can get investors to begin to appreciate the rest of E*Trade.

For instance, on Wednesday the company posted a 21% sequential spike in daily average revenue trades (DARTs) for the month of July. That's certainly impressive news, yet mortgage fears and a jittery market still pummeled the stock.

It's going to be a long way back out of the teens for E*Trade, but at least it's taking steps in the right direction for a change.

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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. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy charges zero commissions.