Starting your own Forex MM

Quote from Ivanovich:

What do I, personally, need as a qualification (ie, series 7,etc) in order to manage other accounts (from a regulatory standpoint)?
More...

You don't need any qualifications if your forex market maker business is not registered in US.

There are costs involved with this as you may need to purchase a forex trading platform. The price of it varies, but it starts from about $10k downpayment plus the company that sells it to you may want a cut of your profits.

On the other hand as a market maker you could take the other side of your clients transactions or give them up to a clearing house. Also you would have an incentive to place lots of trades. So you could still make money even though your clients are not.

To be honest a see a huge conflict of interest here ... I'm not sure how much your clients would like that.
 
Quote from Ivanovich:

An odd question, and I'm not sure anyone here will actually have the answer, but I'm looking to start a forex market maker.

The thing is, I won't open it to the public. It'll only be for clients that I agree to take on, and it will only be managed accounts.

My question as far as requirements go is two fold...

1. What do I, personally, need as a qualification (ie, series 7,etc) in order to manage other accounts (from a regulatory standpoint)?

2. How do market makers like Oanda or IB get their forex quotes - ie, do they connect through an intermediary bank? Is there anywhere online I can go to see what access like that would cost?

Thanks in advance.
More...


OK, you are confusing two things here : MM is somebody who "makes" the price for its customers: e.g. a bank, a retail platform etc. This is very different from managing someone's money ( and in the process "taking" the price from one or several MMs).

If you want to manage funds you have two options it seems.

One: clinets open account directly with a MM and give you the power of attorney to trade. No registration needed since the funds are held with a registered FCM (the MM in question).

Two: you create a legal entity and hold the funds yourself - then you will need NFA/CFTC registration. Obviously the entity will then need to open an account with a MM to trade the funds.

This is very approximative of course, but the logic is valid I believe
 
Quote from ZoneTrooper:

FYI, I've looked into the FXManager. So far it looks very easy and very promising. They have a few bugs to work out, but I believe it will work for me, and I will believe it will work for anyone that wants to manage someone else's money easily.

The nice thing is that the way they are setting it up you don't Handle any money, you just get trading authority, and you deduct your fees from accounts. This makes it so that you do not have register as a CTA or anything else. Registration is completely voluntary for now.

I'm planning on opening up my own business with this platform. Already have several clients line up.
More...

Does anyone have any practical experience (whether as a client or manager) or comments on Oanda's FXManager, about such as business model and platform operations? TIA
 
You must log in or register to reply here.
Back
Top