It's been a wild ride for E*TRADE (NASDAQ:ETFC).

Shares of the online broker have been volatile little suckers as investors ponder its potential as a turnaround and buyout candidate.

This week finds the discounter beefing up its finances, raising $147 million in a stock sale. Dolling itself up isn't easy when investors still see the banking demons that had the company against the ropes.

However, it is E*TRADE's growing brokerage accounts business that is leading many to speculate that rivals Charles Schwab (NASDAQ:SCHW) or TD AMERITRADE (NASDAQ:AMTD) may gobble up the company sooner rather than later.

BMO Capital Markets analyst Michael Vinciquerra doesn't see it that way, at least not now. He feels that potential buyers will want to see the company's credit outlook improve before making a move.

"Buying on a takeover possibility might be a good idea 10-12 months from now, but we think it's foolhardy in the near term," he writes in an analyst note.

That's the rub, though.

The moment that E*TRADE has successfully conquered its mortgage-related shortcomings is also the same time that the broker will feel perfectly fine growing on its own.

Its discount brokerage business continues to grow, and the E*TRADE Baby is a more memorable marketing icon than anything that its rivals have cooked up.

Schwab and TD AMERITRADE also need to be careful. They're not the only ones in this blinking contest. Knight Capital (NASDAQ:NITE) and optionsXpress (NASDAQ:OXPS) are imperfect fits, but why should revitalized banking giants with brokerage bents such as Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM) stay away?

E*TRADE may not be a clean buyout magnet for a few more quarters, but all it takes is one impatient nibbler to make a deal happen sooner rather than later.

In the market for a new discount broker? The way that rates and initial deposits are bouncing around, I can't say that I blame you. Check the sponsored broker comparison table in the Discount Broker Center to see if you can find the bargain-minded brokerage outfit that's right for you.

optionsXpress, and Charles Schwab are Motley Fool Stock Advisor selections. Try any of our Foolish newsletter services, free for 30 days. It's more than a fair trade.

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.