Series 7 to trade my Own money?!

[alanm]

AZ: No, you don't have to form a corporation. There may be reasons to do so, depending on how much money you will make, what state you live in, and other factors, but those are the same factors that apply to forming any single-person corporation (e.g. lawyers, doctors, etc.). Unless your planning on doing something to cause you to need to hide behind a corporate liability shield (does this even work for S/C corps?), you don't need it to start out. Give an accountant a couple hundred for a consult to tell you the pros/cons.

Additionally, corps have to pay professional exchange fees, which can amount to hundreds of dollars a month, depending on what you trade and whether you want to have a backup platform (for which you must pay a second set of exchange fees).

 

[Don Bright]

Quote from AZ_Trader_Girl:

I've been looking to trade my own money at a pro-firm like for example (Assent, Hold Bros, Echotrade (etc) )and at least at Echo, it looks like you have to have your Series 7 even if you want to trade your own money...Am I right? If so, then why do you NOT need it at the other firms (like Assent, Hold Bros)?

If you have to be an employee for at least 4 months before sitting for the exam (I read that somewhere but I could be wrong), then that's 4 months of wasted time for everyone involved seeing as how I want to trade my own money and I can't do that until I have the license, right?

You're getting some real bad information....you can "trade your own money" anywhere that has a retail account set up available. We have our traders use that account while they're studying for their exams. There is no "4 month employee" restriction...there is a 4 month "window" for you to take your exam.

Feel free to call if you have any specific questions that I can help with.

Don

 

[Scec]

Quote from AZ_Trader_Girl:

[....and it appears that most people create corporations (even if they are the only member) in order to do so... Other than for things like medical insurance, pensions etc, there must be some reason to do this...either because it is required or because its just the better thing to do... Obviously I've confused myself but I'm trying to go at this the right way to start with, not have to fix my mistakes later on down the road. Ultimately I will have to get guidance from my dad's accountants and whatever, but I really wanted to do the bulk of this without his help. If I go in with the reasons why I need to form a corp or whatever I need to do, then I can get help with the details without having to count on someone else to interpret my wants and needs.... So any and all advice is greatly appreciated... GREATLY appreciated. [/B]

Most traders form LLCs, not S corps. Even if they trade their own funds, and act as the sole client. This is generally for liability protection, as the benefits of pension or health insurance do not apply.

 

[calibertrader]

Quote from AZ_Trader_Girl:

No doubt I have homework to do, that's a large reason why I'm here on the boards... but what I'm still confused about is why prop firms like Assent & Hold DON'T require you to use their leverage and in turn don't require the series 7 where as Echo does?

I'm missing some very basic info here, I just don't know what....

I don't know where you got the idea that Hold or Assent do not require a series 7 for prop traders, but I know for a fact they do. I worked at Assent, and now run a group at Hold and both firms require both the 7 and 55, unless you are a customer trader then it is not required, but you are subject to PDT rule (maintaining 25K in capital), and can only recieve reg T leverage (4 to 1 intra-day and 2-1 overnight).