Frenetic trading in Internet stocks pushed up online trading volumes as much as 50 percent in January, after a 34 percent rise to a record 340,000 trades a day in the fourth quarter, according an analyst with CS First Boston.
"Spot checks with industry sources confirm that online trading volumes are currently running 25-50 percent higher than last quarter's record pace," analyst Bill Burnham said in a research note on Tuesday.
Trading at AmeriTrade Holding (AMTD), for example, grew 38 percent in the fourth quarter, according to the company's chief executive.
The surge in online trading comes as overall stock market volumes rose just 6.4 percent in January, but trading in Internet stocks soared 22.4 percent. Investors funneling trades through the Internet have a penchant for trading shares in companies that also do business on the Net, such as Amazon.com (AMZN).
Burnham expected to raise his estimates on two publicly traded Internet companies -- AmeriTrade and ETrade Group (EGRP) -- by the end of February, if the growth rates keep up. The analyst also expected the stocks, which have soared tenfold in the past four months, to keep rising.
"Given the high degree of sensitivity that these stocks are showing to incrementally positive news, we expect that news of these strong volumes may run the stocks even further, as hard as that may seem," Burnham said.
AmeriTrade's stock was trading down US$6.50 at $98.50 in midday trading, and ETrade was down $5.18 at $57.25.
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