E*Trade (NYSE:ET) lives on one thing: trading volume. Well, it lives on more than that (banking, asset management services, mortgages, etc.), but increased trading volume seems to get investors very excited about this company. Last month's activity, in particular, certainly made them happy.

For October's daily average revenue trades (or DARTs), E*Trade saw healthy double-digit increases across all categories. Retail DARTs jumped 21% to 77,117 as compared with September. Professional DARTs increased 34.7% to 45,995. Adding those two numbers together yield total DARTs of 123,112, a value which represents an increase of 25.8% over the previous month.

These statistics are impressive and reflective of the marketplace's current bullish mood. Indeed, it is assuredly a better environment for brokers when compared with the situation detailed in a recent report on E*Trade's last earnings release. Competitors such as Ameritrade (NASDAQ:AMTD) and Toronto-Dominion Bank's (NYSE:TD) TD Waterhouse couldn't be happier with all the renewed interest. It's a simple equation: A rising market usually induces more commission-generating trades; a falling one generally sends investors into a state of bearish hibernation.

E*Trade will probably make for an interesting long-term hold (after all, financial services are important products for which there will always be a need), but it should be understood that the company (as well as any of the other brokerage equities) can at times constitute a wild ride, fluctuating up and down in sympathy with overall market sentiment.

The company does currently sport a nice rating from Investors Business Daily in terms of earnings performance but is only considered average when it comes to sales, profit margins, and return on equity. Hopefully, the powers that be can trade up that latter rating and really instill confidence in its prospects.

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Fool contributor Steven Mallas owns none of the companies mentioned.