The more things change, the more they stay the same.

For years, discount brokerages have yearned to diversify, and many of them have. And yet retail trading volume remains a key indicator of their success, albeit not to the same degree as it was five years ago. Still, the media has noted that volume has swooned for the top discounters. Charles Schwab for example reported that volume declined roughly 8 percent over the last month. Further weakening would not surprise executives. E*Trade and TD Ameritrade have also seen their volumes decline.

To boost volumes, these companies are turning to other markets, notable the options market. Over the years, retail investors have grown more comfortable with the idea of trading options. Their marketing has borne fruit, as retail volume has soared over the years. This year, volume is up more than 20 percent. The discounters want a piece of that pie, but the market is not without risk.

In general, retail investors are more savvy these days. There will be many who can handle the risks. But as expert tells Bloomberg BusinessWeek, "Options are kind of like the crack cocaine for brokerage firms. They're easy money, huge commissions, and they tend to be extremely addictive for those who actually trade them."

We can only hope that large portions of the customer base do not get wiped out. We certainly hope that people are doing more than loading up on calls or puts based on their gut. If the retail population has indeed gotten savvier, this bodes well for the movement. 

For more:
- here's a Dow Jones article on trading volume

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