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Trump Tweets Generate Revenue for Discount Brokers

January 20, 2017

President Donald Trump’s activity on social media platform Twitter has been great for the business of discount brokerages, the Wall Street Journal writes.

TD Ameritrade chief executive Tim Hockey tells the paper that Trump’s mere “social-media presence” has had an “unambiguous” and positive effect on trading activity among the discount brokerage’s clients and, hence, on commission generation. In the fourth quarter of 2016, TD Ameritrade had an 11% jump on the number of client trades compared to the year prior, making it the third best quarter in the firm’s history, the Journal writes.

Hockey tells the Journal that trading activity picked up immediately after Trump’s win in the presidential race and spiked every time the president-elect mentioned a specific firm in his tweets. Boeing was just one such example: when Trump tweeted a suggestion last month that the U.S. government shouldn’t buy a new Air Force One from the firm, trading in its stock spiked 93% compared to its previous 15-day average, Hockey tells the paper.

Charles Schwab, who didn’t connect the President’s social media use to spikes in trading volumes, nonetheless also reported a jump in trading activity, posting a 7% rise in client trades in the fourth quarter over the year prior, according to the paper.

President Donald Trump

New retail brokerage account openings, meanwhile, jumped 21% in the fourth quarter over the previous year, the Journal writes.

Meanwhile, an ETrade study cited by the paper of 900 active investors with at least $10,000 in investable assets held at online brokers found that Millennials have been particularly keen to trade on Trump tweets.

Three-fifths of those between 25 and 34 traded directly based on a tweet by the new president, although that figure fell to 36% for those between 35 to 54 and 20% for investors 55 and over, according to the survey.

By Alex Padalka
  • To read the Wall Street Journal article cited in this story, click here.