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Going into 2008, it's been an extreme experience for online brokers. There has been considerable volatility in equities, with the major averages falling an average of 10%. What's more, home prices remain depressed.
So, for a company like optionsXpress (NASDAQ: OXPS), which relies heavily on the retail investor, it's been a challenge. Yet, the company somehow keeps growing.
In Q1, profits increased 12% to $23.8 million, or $0.38 per share. Revenues were up 11% to $60.8 million.
Basically, optionsXpress continues to be effective with customer acquisition, especially with its broad tools and educational resources. It also helps that its competitors – such as E*TRADE Financial Corporation (NASDAQ: ETFC) – are suffering.
Something else: optionsXpress was smart to launch a new platform for futures trading. No doubt, this helps investors find ways to deal with volatility. What's more, futures allow for participation in hot markets, such as energy, gold, grains and so on.
True, this part of the business is still relatively small. But, I'm sure it will remain a focus of investment – and diversification -- going forward.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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