Count Tim Hockey among executives who aren’t overly concerned about the volatility that rocked the markets late last year.
“Volatility in the markets, for us, is not a risk; it’s an opportunity,” the TD Ameritrade CEO told Fortune on Wednesday morning, fresh off of his brokerage’s quarterly earnings call. “We make a lot of money when people are buying and selling, as they tend to do in the final throes of a cycle. And [the cycle] is getting a little long in the tooth.”
Indeed, the Omaha-based company reported robust results in its first fiscal quarter of 2019 (the three months ended December 31, 2018), more than doubling its earnings in the period year-on-year to $604 million and beating analyst estimates with reported revenues of $1.52 billion.
Of course, those figures were undoubtedly helped by TD Ameritrade’s September 2017 acquisition of discount brokerage Scottrade, which scaled up the company’s business and helped drive a 28% hike in client trading activity as well as a record $32 billion in net new client assets in the quarter.
But as Hockey noted, December’s shaky markets worked in his brokerage’s favor as investors were keen to move their cash around. That involved a noticeable “shift from equity to more yield-bearing instruments” like fixed-income products, as well as what he deemed a “longer-term shift in our business” toward “more sophisticated vehicles” like derivatives and futures.
“Futures are almost 10% of our trading now, and it used to be close to zero,” Hockey said. “Consumers, investors and traders are getting much more comfortable in using these kinds of instruments in finding out where there are opportunities.”
Looking ahead, Hockey said its worth keeping an eye on 2019’s tech-heavy class of IPOs on the horizon—with the likes of Uber, Lyft, Airbnb and Slack all gearing up to tap the public markets and investors likewise eager to get in on the action
“People are clamoring to get a piece of these companies; because they’ve been private, [investors] have not had the opportunity,” he said. “If you have a number of these large players coming to market, that’s a very good thing for our business. Our trading levels skyrocket.”