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[Letterhead of Ameritrade Holding Corporation]

September 21, 2005

Via EDGAR

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Ladies and Gentlemen:

On behalf of Ameritrade Holding Corporation (the “Company”) we respectfully submit this letter in
response to the comments received from the Staff of the Securities and Exchange Commission (the
“Staff”) in a letter from Paul Cline dated August 25, 2005 (the “Comment Letter”).

The discussion below is presented in the order of the numbered comments in the Comment Letter.

Staff Comment 1: Note 16. Derivative Financial Instruments and Hedging Activities, page 59

Please describe the initial arrangement with the counterparty related to your prepaid variable
forward contracts, including all significant terms. If there was a signed contract documenting the
initial arrangement, please provide us with a copy.

Company response:

In February 2003, the Company arranged with the counterparty to enter into prepaid variable forward
contracts designed to:

    •

    Provide a hedge against movement of the price of all 7,907,350 shares of our Knight
Trading Group, Inc. Class A common stock (“NITE”) via zero cost collars. The floor (put)
and cap (call) prices of the zero cost collars were to be based on the weighted average of
the prices at which the counterparty was able to execute its initial short sales of the NITE
stock. Due to the large number of shares involved and the potential stock price effect of the
counterparty’s initial short selling into the market, we expected that there would be
multiple zero cost collar tranches needed in order to hedge the entire NITE position.

    •

    Allow the Company to sell its NITE stock forward at a
predetermined price range (between the floor and cap of the contracts), which was based on
the weighted average short sale prices of each of the contracts.

    •

    Provide for zero coupon borrowings against the future proceeds of the forward sales.
The interest on such borrowings was prepaid so the credit quality of the Company was not a
factor in determining the interest rate. The Company received the borrowed funds net of
the discounted interest payments. Under the terms of the contracts, the Company is able to
repay the loan by delivering NITE stock.

The general terms of the prepaid variable forward contracts are governed by a Master Terms and
Conditions for Pre-Paid Share Forward Transactions and an ISDA Master Agreement, filed as Exhibits
10.3 and 10.4, respectively, to the Company’s quarterly report on Form 10-Q for the quarter ended
March 28, 2003.

Tranche 1:

The initial prepaid variable forward transaction was entered into on February 27, 2003 and was
documented in writing by a signed Transaction Acknowledgment (see Appendix 1). The significant
terms were as follows:

Underlying Number of Shares: 5,200,000 shares of NITE

Hedge Price: $4.77 per share (based on a single block sold short by the counterparty in a
negotiated transaction)

Securities and Exchange Commission, September 21, 2005

Page 2 of 5

Notional Size: The Number of Shares multiplied by the Hedge Price.

Maturity Date: Four years from the inception of the transaction.

Cap Price: $5.724 (applicable to all Number of Shares) (equal to 120% of the Hedge Price)

Floor Price: $4.770 (applicable to all Number of Shares) (equal to 100% of the Hedge Price)

Monetization Amount: $21,331,440 (86.00%)

As indicated in the text of the Transaction Acknowledgment, the Transaction Acknowledgment was
later replaced and superseded by a Confirmation. The Confirmation for this transaction was filed
as Exhibit 10.6 to the Company’s Form 10-Q for the quarter ended March 28, 2003.

Tranche 2:

On February 28, 2003, the Company instructed the counterparty to continue hedging an additional 2.7
million NITE shares provided the stock price traded above a certain price level. As a result, the
Company and the counterparty negotiated terms very similar to the ones executed on Tranche 1 but
with a three year maturity. These terms were agreed upon in telephone
conversations between the Company and the counterparty and then
documented in a second Transaction Acknowledgment (see Appendix 2) from the counterparty. This
second Transaction Acknowledgment was not signed by the Company since the counterparty was
satisfied with the verbal order to transact, which is a common practice for transactions subject to
a price limit. The significant terms agreed upon between the parties were as follows:

Underlying Number of Shares: Up to 2,700,000 shares of NITE

Hedge Price: The average price per share at which the counterparty establishes its hedge (short
sale position) in respect of the Prepaid Variable Forward.

Notional Size: The Number of Shares multiplied by the Hedge Price.

Maturity Date: Three years from the date the counterparty establishes its hedge (short sale
position) in respect of the Prepaid Variable Forward.

Cap Price: 115% of the Hedge Price (applicable to all Number of Shares)

Floor Price: 95% of the Hedge Price (applicable to all Number of Shares)

Monetization Amount: 85.5% of the Notional Size

The Company instructed the counterparty to enter into short sales pursuant to the terms above at a
minimum price of $4.77 per share. By March 21, 2003, the counterparty was only able to enter into
six short sales supporting 194,457 underlying shares, after which the price of NITE dropped below
the $4.77 minimum price. On April 7, 2003, Tranche 2 was closed and the Company executed a final
Transaction Acknowledgment (see Appendix 3) and final Confirmation with the counterparty.

Tranche 3:

In May 2003, the market price of NITE strengthened, and the Company decided to hedge its remaining
position. On May 30, 2003, the Company received a draft of the third Transaction Acknowledgment
from the counterparty. The Company updated the number of shares and executed the Transaction
Agreement (see Appendix 4), the significant terms of which were as follows:

Underlying Number of Shares: Up to 2,512,893 shares of NITE (representing all of the remaining shares of NITE not yet hedged by the Company)

Hedge Price: The average price per share at which the counterparty establishes its hedge (short
sale position) in respect of the Prepaid Variable Forward.

Notional Size: The Number of Shares multiplied by the Hedge Price.

Maturity Date: Three years from the date the counterparty establishes its hedge (short sale
position) in respect of the Prepaid Variable Forward.

Cap Price: 115% of the Hedge Price (applicable to all Number of Shares)

Floor Price: 95% of the Hedge Price (applicable to all Number of Shares)

Monetization Amount: 85.5% of the Notional Size

The counterparty executed five short sales through June 5, 2003 to complete this order. Tranche 3
was closed and the Company executed a final Confirmation as of that date.

The Confirmations for Tranches 2 and 3 were filed as Exhibits 10.3 and 10.4, respectively, to the
Company’s Form 10-Q for the quarter ended June 27, 2003. None of the Transaction Acknowledgments
were filed as exhibits to the Company’s periodic filings, as by their terms they were replaced and
superseded by the Confirmations.

Securities and Exchange Commission, September 21, 2005

Page 3 of 5

Copies of the each of the Transaction Acknowledgments are being supplementally provided to the
Staff as Appendices 1 through 4 to this letter, to assist in understanding the transactions. We are
also supplementally providing copies of the “Hedging Execution Logs” for Tranches 2 and 3 (see
Appendices 5 and 6, respectively) from the counterparty, which detail each of the individual short
sale transactions during the accumulation periods along with the calculations of the weighted
average terms of each tranche. No such log exists for Tranche 1, since the counterparty executed
the short sale transaction for that tranche in a single block trade.

Staff Comment 2: Note 16. Derivative Financial Instruments and Hedging Activities, page 59

Please tell us the number of individual prepaid variable forward contracts entered into related to
the 7.9 million Knight shares and describe how the hedged price was determined for each contract.
For example, we note that in Tranche 1 the floor price of the forward contract appears to equal the
hedged price ($4.7700). We would expect that with a zero cost collar the floor price would be below
the hedged price.

Company response:

The Company entered into three tranches of prepaid variable forward contracts. The hedge price for
Tranche 1 was determined by the price per share in which the counterparty established its hedge
(short position) with respect to the prepaid variable forward contract in a single block trade.
The hedge price for Tranches 2 and 3 was determined based on the weighted average price per share
at which the counterparty established its hedge (short position) in respect to the prepaid variable
forward contracts over a period of time, pursuant to the Transaction Acknowledgments described in
our response to Staff Comment 1.

We
respectfully note that many different combinations of options could result in a zero cost collar
and not necessarily only in instances where the floor price is below the hedge price. In order to
accomplish a zero cost collar, the floor price for prepaid variable forward contracts normally
ranges between 95% and 100% of the hedge price, depending on the term of the contract. The cap
price normally ranges between 115% and 120% of the hedge price. Tranche 1 had a four-year term,
while Tranches 2 and 3 had three-year terms. Accordingly, the floor and cap prices for Tranche 1
were higher. In each case, however, there was no cost to the Company for the collar. As further
discussed under Staff Comment 5, the interest rate on the debt was consistent with prevailing
market interest rates, which further supports the conclusion that the contracts were zero cost
collars.

Staff Comment 3: Note 16. Derivative Financial Instruments and Hedging Activities, page 59

Please tell us whether you entered into a separate prepaid variable forward contract and documented
a separate hedge relationship for each date within the hedging periods (i.e. for Tranche 2 dates
between 2/28/03 and 3/31/03).

Company response:

Each tranche was a separate prepaid variable forward contract, for which the hedge, floor, and cap
prices were determined by the short sale transactions executed by the counterparty during the
accumulation periods. We understood from the counterparty that for practical reasons the market
practice for this type of hedging transaction was to aggregate a certain number of short selling
hedging days into single tranche contracts. As a result, we did not enter into a separate prepaid
variable forward contract for each date within the hedging periods.

For example, for Tranche 2, the counterparty received the order to execute a prepaid variable
forward contract on February 28, 2003. The counterparty was able to execute six short sales before
the price of the underlying stock fell below our minimum price. The first short sale was on
February 28, 2003 and the last was on March 21, 2003. Tranche 2 was closed and priced on April 7,
2003 based on the weighted average price of the six short sales completed.

Staff Comment 4: Note 16. Derivative Financial Instruments and Hedging Activities, page 59

Please provide the contemporaneous hedge documentation prepared for the prepaid variable forward
contracts entered into on February 28, 2003, March 21, 2003 and May 30, 2003. If contracts were
not entered into during each day specified above, please provide the documentation for the next day
a hedge was entered into.

Securities and Exchange Commission, September 21, 2005

Page 4 of 5

Company response:

Copies of a) an initial memorandum documenting our hedge designation for the prepaid variable
forward contract initiated on February 27, 2003 (Tranche 1), b) a second memorandum documenting our
hedging designation for the prepaid variable forward contracts initiated on February 27, 2003
(Tranche 1) and February 28, 2003 (Tranche 2) and c) an addendum which was prepared for the
contract initiated on May 30, 2003 (Tranche 3) are being provided supplementally to the Staff. The
second memorandum was presented to our Audit Committee at its regular meeting on May 20, 2003
pursuant to the Company’s Derivatives Policy. The addendum for Tranche 3 was presented to our
Audit Committee at its regular meeting on August 2, 2003.

The Company’s Derivatives Policy, dated as of August 20, 2002, specifies that the Company does not
use derivative instruments for speculative or trading purposes and is being supplementally provided
to the Staff as Appendix 7. The hedging designation memorandums are being supplementally provided
to the Staff as Appendices 8 through 10.

Staff Comment 5: Note 16. Derivative Financial Instruments and Hedging Activities, page 59

Please confirm that you considered each individual prepaid variable forward contract to be a zero
cost collar.

Company response:

We considered each of the embedded collars within each of the prepaid variable forward contracts to
be a zero cost collar. The net proceeds exchanged were equal to the notional amount less the
prepaid interest on this same amount. Therefore, there was no exchange of cash related to the
collar making it zero cost. Additionally, the implicit interest rate on the contracts ranged from
3.8% to 5.2%, which represented the rate at which the counterparty was willing to lend money to the
Company based on prevailing market interest rates for three or four year terms.

Staff Comment 6: Note 16. Derivative Financial Instruments and Hedging Activities, page 59

Please tell us how often you received cash from the counterparty related to your prepaid variable
forward contracts.

Company response:

We
received cash after executing the final Confirmation with respect to each tranche of prepaid
variable forward contracts. Specifically, we received the cash for
each tranche on the following
dates:

    Confirmation Date

    Date Cash Received

    Tranche 1:

    February 28, 2003

    March 4, 2003

    Tranche 2:

    April 7, 2003

    April 8, 2003

    Tranche 3:

    June 5, 2003

    June 9, 2003

If you have any questions concerning the above responses, please contact me at (402) 597-7781 or
William J. Gerber at (402) 827-8933.

     Very truly yours,

/S/ JOHN R. MACDONALD

John R. MacDonald

Executive Vice President,

Chief Financial Officer and Treasurer

Securities and Exchange Commission, September 21, 2005

Page 5 of 5

Appendix Index

    Appendix 1

    Transaction Acknowledgment – Tranche 1

    Appendix 2

    Transaction Acknowledgment – Tranche 2

    Appendix 3

    Revised Transaction Acknowledgment – Tranche 2

    Appendix 4

    Transaction Acknowledgment – Tranche 3

    Appendix 5

    Hedging Execution Log – Tranche 2

    Appendix 6

    Hedging Execution Log – Tranche 3

    Appendix 7

    Ameritrade Holding Corporation Derivatives Policy

    Appendix 8

    Initial Hedge Designation Memorandum (Tranche 1)

    Appendix 9

    Hedge Designation Memorandum (Tranches 1 and 2)

    Appendix 10

    Hedge Designation Memorandum – Addendum (Tranche 3)

Appendix 1

February 27, 2003

AMERITRADE HOLDING CORPORATION

Attn: Tim Nowell

Fax: 402 597 8470

This confirms the economic terms and conditions of the Prepaid
Variable Forward transaction (the “Transaction”) that
you have agreed to enter into with Citibank, N.A.
(“Citibank”). This is a summary only; full
documentation will be in the form of a trade confirmation (the
“Confirmation”), which will incorporate the terms of
the 1992 ISDA Master Agreement and be governed by the 1996 ISDA Equity Derivatives Definitions (both published by
the International Swaps and Derivatives Association), copies of
which are available from us upon request and if not pre