Valuating Self Wealth & Competition Risk 2021 and beyond, page-17

Trades can be very seasonal (Christmas low, spike in free trades after EOFY sale, high sign-ups post-new-year with a delay until they start trading). Active traders is less seasonal, and is cumulative.

Active traders is the less volatile metric, which should be good for projecting performance longer-term (multiple quarters out). Trades being better for predicting revenue/profit 1 quarter out.

Active traders is used make sure that the growth rate suggests that market share is still increasing. Commsec by comparison seems to be growing in absolute terms, but losing market share, so they must be growing slower than the overall market. Growing faster than the market is better - meaning you come out ahead no matter if the seasonality is good or bad.


Combine active traders metric with Trades Per Trader Per Month, and you're then tracking both market share and internal usage. Eg. active traders rises strongly - good relative performance vs competitors. Trades per user hypothetically rises after the app release - good internal improvements. Both are multiplicative.