UPDATE: TradeStation Daily Volume Hit 2-Year Low In August

TradeStation Group Inc. (TRAD) said average trading volume fell 17% last month, hitting the lowest level since May 2007.

Daily average trades for electronic trading platform dropped to 76,808 in August, also down 3.6% from July. Last month's figure is the smallest since May 2007's 68,663. Since then, overall market trading volume has surged amid the credit crisis and subsequent slump and rebound in equities markets.

However, TradeStation's August metrics likely won't provide an accurate barometer to predict results from its industry peers. The firm uses a rule-based trading platform, which executes trading decisions based on data gathered over a period of time.

Raymond James analyst Patrick O'Shaughnessy said that TradeStation "should be an outlier" this month. O'Shaughnessy and others expect online brokers, such as TD Ameritrade Holding Corp. (AMTD) and E*Trade Financial Corp. (ETFC), to post better-than-expected DARTs due to strong trading activity in low-priced stocks such as Citigroup Inc. (C).

Client assets at TradeStation were up 6% from a year earlier to reach a new high of $1.93 billion despite the stock market's decline. They rose 1.8% from July.

The company last month reported weaker second-quarter results, which TradeStation largely blamed on lower interest rates cutting net interest income. Brokerage commissions and fees rose 13%.

Shares of TradeStation recently traded up 6 cents at $7.09. The company's stock is down 30% over the past year.

-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354; [e-mail]

(Brett Philbin contributed to this report.)