While TD Ameritrade Holding Corp predicted a bold jump in trading by individuals next year, smaller online broker E*Trade Financial Corp , dealing with in-house loan losses, cautioned that much uncertainty still lies ahead.

The popular U.S. discount brokerages reported quarterly results that beat Wall Street expectations on Tuesday, as clients jumped in to take advantage of the broad stock market rise. Chief executives at both companies described individual investors as resilient.

But they shared little else.

TD Ameritrade's $157 million profit was propelled by record trading and the acquisition of thinkorswim Inc in June. That gave the Omaha, Nebraska-based company a solid footing to declare it was seriously considering using its $1.14 billion in cash for yet another acquisition.

2009 was a great year for organic growth and we see momentum continuing to build, ... and we plan to use our strong financial position to take advantage of new opportunities to deliver additional growth, TD Ameritrade CEO Fred Tomczyk told analysts and the media on a conference call.

TD Ameritrade, which runs the largest U.S. discount trading platform, predicted that daily average revenue trades (DARTS) could jump as much as 28 percent from the record in fiscal 2009. Trading volume swelled 47 percent in the last two years.

The company added that a share buyback or dividend could also be on the horizon, but issued what one analyst called a conservative earnings outlook, weighing on its shares, which slipped 1.1 percent on Tuesday.

OPPOSITE DIRECTIONS

But while TD Ameritrade's stock has jumped about 80 percent over the last year, E*Trade slid 25 percent as some investors hoped for a revival and others doubted its survival.

E*Trade shares briefly dropped 3.2 percent after the close of markets Tuesday, when the company reported its ninth straight quarterly loss, before recovering most of that lost ground.

It's a stock with so much hope riding on it, people can read into small details, said Morningstar analyst Jason Ren.

New York-based E*Trade showed more signs that its loan loss troubles are easing, logging lower charge offs and loan loss provisions than in the previous quarter. But a 1 percent rise in home equity portfolio early-stage delinquencies raised some eyebrows.

In an interview, E*Trade CEO Donald Layton played down the small delinquency rise, noting the portfolio made big gains earlier this year. But he declined to predict when E*Trade might return to profitability. It's better to manage from caution at this point, he said.

Indeed, the company is still reeling from bad bets its bank made earlier this decade in the real estate market, which eventually collapsed, ringing in the financial crisis.

Layton, who will step down by year end, later told analysts and media on a call that E*Trade's core value lies in its investor franchise, noting that at times it's been a tough and very stressful two years at the company's helm.

He also declined to forecast DARTS in coming quarters, noting only that the industry has enjoyed volume growth despite predictions nine months ago of a major trading slump.

Online brokers may be one of the few, if not the only, financial services sectors where business has generally been good in terms of volume, Layton said in the interview.

(Reporting by Jonathan Spicer; Editing by Richard Chang)

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