A bull market is doubly kind to a company like E*Trade Financial (ETFC). In addition to the broader sentiment that is lifting stocks across the board, a bullish mentality among traders increases activity among customers for this online brokerage — and subsequently, the fees that E*Trade can charge.
That’s a double-edged sword, of course. When the financial crisis hit, traders were terrified of the stock market and bailed out altogether. At the same time, folks who lost their jobs and were struggling to keep their houses couldn’t put money in the stock market even if they wanted to. As a result, ETFC is down about 95% from its 2006 highs.
However, stability in capital markets coupled with a bit of recovery have turned the tide at E*Trade. Taken with a serious cost-cutting mission, ETFC’s profitability has improved as the dust has settled in the wake of the financial crisis.
That has been good for all investors — both E*Trade customers looking to trade the market, and those who own ETFC stock specifically.