eTrade 2011 Annual Report Download - page 5

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•Improving our market position in our retail brokerage business. We plan to grow our customer base by
continuing to increase our sales force, focus on long-term investing and develop innovative products
and services.
•Accelerating the growth of our corporate services and market making businesses. Our corporate
services and market making businesses enhance our strategy by allowing us to realize additional
economic benefit from our retail brokerage business.
•Enhancing our position with long-term investors. We believe growing our investing and retirement
products and services is key to our long term success. Our primary focus is to expand the reach of our
brand along with the awareness of our products to this key customer segment.
•Optimizing the value of our bank franchise. Our retail brokerage business generates a significant amount
of customer cash and we plan to continue to utilize our bank to optimize the value of these customer
deposits.
PRODUCTS AND SERVICES
We assess the performance of our business based on our segments, trading and investing and balance sheet
management. We consider multiple factors, including the competitiveness of our pricing compared to similar
products and services in the market, the overall profitability of our businesses and customer relationships when
pricing our various products and services. We manage the performance of our business using various customer
activity and financial metrics, including daily average revenue trades (“DARTs”), average commission per trade,
margin receivables, end of period brokerage accounts, net new brokerage accounts, customer assets, net new
brokerage assets, brokerage related cash, corporate cash, E*TRADE Financial Tier I leverage and common
ratios, E*TRADE Bank Tier I capital ratio, special mention loan delinquencies, allowance for loan losses,
enterprise net interest spread and average enterprise interest-earning assets. Costs associated with certain
functions that are centrally-managed are separately reported in a corporate/other category.
Trading and Investing
Our trading and investing segment offers a full suite of financial products and services to individual retail
investors. The most significant of these products and services are described below:
Trading Products and Services
• automated order placement and execution of U.S. equities, futures, options, exchange-traded funds and
bond orders;
• FDIC insured sweep deposit accounts that automatically transfer funds to and from customer brokerage
accounts;
• access to E*TRADE Mobile, which allows customers to securely trade stocks and options, monitor
real-time investment, market and account information and transfer funds between accounts via
iPhone®, iPad®, AndroidTM or BlackBerry®smartphone;
• use of Power E*TRADE Pro, our desktop trading software for qualified active traders, which provides
customers with customization capabilities, an expanded feature set and more news and information,
plus live streaming news via CNBC TV;
• an open applications programming interface (“Open API”) for third-party and independent software
developers, which allows customers to have access to technical information and documentation,
reference guides, and other resources to help network external applications and programs with our
active trader platform;
• two-second execution guarantee on all qualified market orders for Standard & Poor’s (“S&P”) 500
stocks and exchange-traded funds;
2