Stock Option Investment Advice

TD Ameritrade Profit Rises by 65%

TD Ameritrade Holding Corp. (AMTD) said its quarterly net income jumped 65% as volatile markets contributed to higher client trading, while the online broker also lifted its profit outlook.

The company said its fiscal first-quarter earnings rose to $240.8 million, or 40 cents a share, from $145.6 million, or 24 cents a share, a year earlier, boosted in part by higher average client trades per day and higher fee-based balances. The Omaha-based online brokerage company said net revenue for the quarter ended Dec. 31 increased to $641.6 million from $535.2 million. TD Ameritrade also increased the midpoint of its fiscal 2008 forecast to $1.32 a share and adjusted its outlook to $1.23 to $1.41 a share.

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The company said average daily client trades rose 35% to a record 322,000. It also posted quarterly all-time highs in investable asset balances and fee-based balances, which climbed 10% and 30%, respectively. “We achieved another record quarter, up 67 percent from last year, despite the uncertain economic environment affecting much of the financial services industry,” said Joe Moglia, chief executive officer. “Our sales efforts are gaining notable traction as our branches and service centers are focused on expanding relationships with clients.” Continued retail investor engagement, increasing traction of its asset gathering strategy and a strong, conservative balance sheet has helped TD Ameritrade Holding Corp.

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TD Bank, a major shareholder, announced separately it expects TD Ameritrade’s first-quarter earnings will translate into a contribution of $88-million to the bank’s profit in its wealth management segment. TD Bank will release its quarterly results and on Feb. 28.

TD Ameritrade and rival Charles Schwab (SCHW) have gained in recent months at the expense of E*Trade (ETFC), which like Merrill Lynch (MER) and Citi (C) have been hit hard by bad bets on mortgage-related securities. TD Ameritrade has also managed to sidestep the problems at rival E-Trade Financial Corp., which has also been hit by its exposure to the struggling U.S. mortgage market. Many customers have pulled cash from e-Trade accounts on speculation the online brokerage might be forced into bankruptcy. The broker has been under pressure since it disclosed massive losses in its mortgage business last year.

Covered Calls:
Investing in stock options leads to a more manageable profitability for prudent investors. Of the many various option investing possibilities, covered call investing is one of generally lower risk. Using the search results on the website of PowerOptions, the following Covered Call Investing options for TD Ameritrade and its competitors were obtained.

PowerOptions covered call search
Option Strike
AMTD 18.22 (+0.47) TQACW 08 MAR 17.5 (53) 1.5 8.2 4.7 4.7
AMTD 18.22 (+0.47) TQACD 08 MAR 20.0 (53) 0.35 1.9 2 11.9
C 27.91 (+0.26) CCS 08 MAR 27.5 (53) 1.69 6.1 4.9 4.9
C 27.91 (+0.26) CCF 08 MAR 30.0 (53) 0.7 2.5 2.6 10.3
ETFC 4.14 (+0.24) EUSCH 08 MAR 4.0 (53) 0.6 14.5 13 13
ETFC 4.14 (+0.24) EUSCA 08 MAR 5.0 (53) 0.25 6 6.4 28.5
MER 57.47 (+0.14) MERCK 08 MAR 55.0 (53) 4.9 8.5 4.6 4.6
MER 57.47 (+0.14) MERCY 08 MAR 57.5 (53) 3.4 5.9 6.3 6.3
SCHW 21.32 (-0.27) SHQCD 08 MAR 20.0 (53) 2 9.4 3.5 3.5
SCHW 21.32 (-0.27) SHQCX 08 MAR 22.5 (53) 0.65 3 3.1 8.9
(For more details click the ticker symbol above)

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[tags] Omaha, Joe Moglia, TD Bank, AMTD, Ameritrade Hldg. Corp. Class A, C, Citigroup Inc., ETFC, E*Trade Financial Corp., MER, Merrill Lynch & Co. Inc., SCHW, Charles Schwab Inc., covered call investing, covered call investment strategy, investment strategy, iron condor, option investing, poweroptions, stock option trading, stock options [/tags]

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